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Level 2

Question

HSA contributions - split over multiple accounts

Forum|Forum|4 years ago
February 21, 2022
16 replies
83 views

I contributed $7,200 total to HSA's.

$5,400 to my HSA tied to a family HDHP through August.

$1,250 to my HSA for single coverage Sept - Dec.

$550 to spouse's HSA for single coverage Sept - Dec.

Turbotax is telling me I contributed $650 too much into my HSA, but shows both accounts could contribute $6,000.

(This is incorrect accounting to this post that says I can contribute any amount to either account, as long as I don't go over the maximum - https://ttlc.intuit.com/community/health-care/help/why-am-i-showing-an-excess-hsa-contribution/00/26610)

Turbotax allows me to withdraw the surplus $650.

If I select this option, all is fine according to Turbotax, but I then didn't contribute my $7,200 maximum.

If I chose to withdraw the $650 and increase the contribution on my spouse's account, which in theory should correct what turbotax is seeing as an over contribution, it then says I contributed $1,300 too much.

Does anyone have any ideas how to correct this?

Mike9241

Level 15

for Sept to Dec did you have self-only coverage for yourself while your spouse had self only coverage for herself or did you actually have family coverage for that period

if self-only for the last 4 months. your maximum contribution for 2021

is $7200 annual amount prorated for 8 months or $4800

+ $3600 annual amount prorated for 4 months or $1200

total for you $6000 max

you contributed to your a/c $6650

spouses maximum contribution

3600 annual amount prorated for 4 months or $1200

she got $550

if you withdraw the $650 from your account + earnings thereon by 4/15/2022 (earnings are taxable) - you would get form 1099-SA showing the withdrawal (maybe not until 2023) contact the HSA trustee for procedure to follow. there should be no penalty (possible Turbotax bug) for 2021

and you can put $650 into spouse's HSA.

here's from the form 8889 -HSA instructions

Excess Contributions You Make
To figure your excess contributions
(including those made on your behalf),
subtract your deductible contributions

(line 13) from your actual contributions
(line 2). However, you can withdraw
some or all of your excess contributions
for 2021 and they will be treated as if
they had not been contributed if:
• You make the withdrawal by the due
date, including extensions, of your 2021
tax return (but see the Note under
Excess Employer Contributions, later);
• You do not claim a deduction for the
amount of the withdrawn contributions;
and
• You also withdraw any income
earned on the withdrawn contributions
and include the earnings in “Other
income” on your tax return for the year
you withdraw the contributions and
earnings.

now if you really had family coverage all year that's the box that should be checked for each month on both forms. then there will be no issues. you can contribute the $6550 to your a/c and the $550 to hers and get a $7200 HSA deductions

Mike9241

mwaltz1Author

Level 2

I agree with your calculations. I didn’t know in the beginning of the year that I would be changing jobs/insurance/HSA and this really should just track if I over contributed in total.

Only $550 out of $1,200 was contributed toward the spousal account.

I should be able to withdraw the $650 over contributed in my account and make a $650 extra contribution in the spousal account before I file my taxes and everything should be solved.

But TurboTax does not allow this.
If I increase the contribution on the spousal HSA by $650 and show that I will be withdrawing $650, TurboTax then shows that we are $1,300 over contributed.

How do I report this issue to TurboTax because I can’t move forward as is.

BillM223

Level 15

To possibly repeat what Mike wrote:

Family Jan – Aug – 4,800

Self-only Sept – Dec – 1,200

Subtotal – 6,000 - his annual HSA contribution limit.

He contributed 5,400 + 1,250 = 6,650 for 650 excess

Her annual HSA contribution limit is 3,600 times 4 divided by 12, or 1,200. Since you have apparently contributed only 550 to her HSA, this means that you should be able to contribute another 650, as you have said.

How are you entering in the HSA interview that she is making an additional $650 contribution to her HSA? Are you entering it as a personal (direct) contribution? And where is TurboTax telling you that the excess is now 1,300?

Please reconfirm (by going through the HSA interview) the contributions you gave us above. Also, if you can give us a screenshot of your HSA Summary screen (with any personal information redacted).

At the end of your reply, please add "@" and "BillM223" without the space in between, so I will be notified when you respond.

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Opus 17

Level 15

@mwaltz1

When Turbotax asks what kind of coverage did your spouse have, did you indicate "none" or "family" for January–August? You should be indicating "family" because she had family coverage even if it was not in her name.

mwaltz1Author

Level 2

Yes, for both sets of questions I answered "family plan" for January - August, and "self only" for September - December.

BillM223

Level 15

So, now, please tell me how you contributed these HSA contributions (who made them and through employer or not), and then tell me how you added the 650 to round out to 7,200. Was it on a W-2 or was it a personal/direct contribution? I am considering the possibility that you added accidentally to your HSA (which indeed would have just increased the excess) or whether not the platform makes a difference.

And when I did this test, I showed Self-only for you and your spouse for September-December. But Opus's question makes me wonder - did one of you have the Family HDHP policy, then on September 1st, one of you left it and started a separate Self-only HDHP policy? This means that the other spouse likely would still have the Family policy (if you had dependents on that policy).

So please also confirm that neither of you had a Family HDHP policy from September to December.

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