HSA Contributions Counting Twice

[ssgomez]

Hello,

Turbo Tax is stating that we have and excess HSA Contribution that is incorrect.  Information you need to know...

• We have one HSA account with both our names on it that we contribute to.
• Husband is over 55 and contributed 4908 to the HSA through employee deduction, which is reported correctly on the W2 form in Turbo Tax,
• He also had a family HDHP plan every month of the year which is noted in the HSA interview process.
• Wife is not 55 and contributed 3700 to the HSA through employee deduction, which is reported correctly on the W2 form in Turbo Tax.
• She has a self only HDHP plan every month of the year which is noted in the HSA interview process.
• On both husband and wife, the additional contributions (not made through employer) was left blank since no other contributions were made except those through the employer.
• Total HSA contribution made was 8608 which is below the threshold of family contributions (7750) with husband over 55 and his extra $1000 contribution.
• On husband's summary on HSA contributions (on the page where you can enter additional contributions) his 2023 employer and payroll contributions match box 12 of his W-2 (4908)
• On wife's summary on HSA contribution (on the page where you can enter additional contributions) her 2023 employer and payroll contributions do not match what is entered in box 12 on the w-2.  The amount it shows on this page is 8608 which is the husband's and wife's contribution combined.
• Again the W-2 box 12 is entered correctly on both spouses

Because of this Turbo Tax is showing an excess HSA contribution.  Why is Turbo Tax counting the husband's contribution twice - on his contribution and then also combined with the wife's contribution?

[dmertz · Accepted solution]

"We have one HSA account with both our names on it that we contribute to."

That's not possible.  HSA accounts have only one owner and only that owner is eligible to contribute (or have contributions made on their behalf) to that account.  Given that both Husband and Wife are making contributions through the respective employers it's not clear which spouse owns the HSA and which spouse is making contributions on the other spouse's behalf.  To be eligible to receive Husband's $1,000 catch-up contribution, it would have to be Husband's HSA.

When both spouses are making contributions through their respective employers to one spouse's HSA, one must be extremely careful in TurboTax when specifying which spouse's HSA is receiving a particular spouse's deposits via payroll deduction.  It might be necessary to delete both W-2s and Form 8889 from TurboTax, then reenter the W-2s, being careful to indicate which spouse's HSA is receiving the contributions, then revisiting the HSA section to reestablish that spouse's eligibility to make the contribution.  If the allocation is entered and subsequently changed without deleting everything, TurboTax can get confused.

Check with the HSA account provider to see which spouse owns the HSA.  As I previously stated, under the circumstances it would have to be Husband's HSA to receive the $1,000 catch-up contribution.  Once Wife reaches age 55, Wife will need her own HSA to receive Wife's $1,000 catch-up contribution.  Also check to make sure that presently there is indeed only one HSA that is receiving these deposits and not a separate HSA for each of you.