HSA Contribution Mistake

[hayden13smith]

I started a new job in September of 2024 that included a high deductible plan with an HSA that had employer contributions. At that same time I was still under my parents low deductible plan. We realized in December that I nor my employer should have been contributing to the HSA in 2024. I am trying to figure out if I need to remove these funds and how and if I need to report them. I did not use any of the funds in 2024 so not sure if that plays into this. 

[BillM223]

Your employer has the power to reclaim those funds under the rubric that they should have known that when they made the contributions, that you were not eligible. If they would do that and issue a corrected W-2 without the code W, that would be the simplest for you. So be nice when you ask your employer about this.

Otherwise you will have to tell TurboTax that you had an HSA so you can enter the HSA interview, then in the HSA interview tell TurboTax that you never had an HDHP coverage (which is how you describe having conflicting coverage).

TurboTax will declare the entire code W amount to be in excess, and add it to your Other Income. The good news is that the HSA custodian will send you a check for the amount of the excess.

Please tell me that you had this employer contribution stopped as of January 1st.

[hayden13smith]

Thank you! My employer said no to reclaiming the funds when I asked initially! I no longer have the low deductible plan so this is not an issue anymore!