HSA and Excess Contribution

[lindenbh]

I made an HSA contribution on 1/5/2023 on my own from my checking account (not with any employer).  I was told I had contributed more than the allowable amount and so then received back into my checking account the overpayment amount on 2/6/2023.  I received a 1099-SA for the overpayment and recorded this in the HSA section of TurboTax.  I am unclear if I have captured these numbers correctly.  For example, if the amount I originally contributed was $2000 and the overpayment I received back was $500, what amount should be reflected on line 13 and line 26 on Schedule 1 (which then populates form1040 line 10) and on form 8889 line 2 and line 14a.  Thank you.

[BillM223]

Are you saying that TurboTax told you that you had $500 in excess HSA contributions in 2023?

Assuming this to be the case:

1. line 2 on the 8889 s/b the $2,000 that you originally contributed.

2. Line 14a should be $500 plus any distributions for qualified medical expenses (you did not mention if you had any).

3. Line 14b (not that you asked) should be the $500 in excess contributions withdrawn by the due date.

4. Line 13 on Schedule 1 should be $1,500 (i.e., the actual personal deduction that was not in excess).

5. Line 26 on Schedule 1 should also be $1,500 plus any other adjustments on lines 11 through 25, not including line 13.

Note: TurboTax should have asked you if the excess was from your direct contribution or from your W-2. The reason is that these contributions, when in excess, are treated differently. I am assuming that you told TurboTax that your direct contribution of $2,000 was in excess. All the answers above would be different otherwise.

If so, let us know and we will update this answer.