HSA excess contributions 2025

[vernitron]

I made excess contributions to my HSA in 2025 (through my employer), which I realized and removed prior to the end of 2025. The excess contributions from my paycheck were pretax. I don't see where these excess contributions are added back into my income in TurboTax. It seems like the excess contributions should be added back to my income. I did receive a 1099-SA with the excess contribution information.

[vernitron]

I am adding a little more information. I obtained the excess distribution from my HSA bank directly, not through my employer. Therefore my W2 does not know anything about the excess distribution.

[BillM223]

How did you know that you had excess contributions for 2025? Did TurboTax tell you this? I wonder if the reason that you don't see where the excess contributions are added back to your income is because TurboTax did not think that you had excess contributions.

You always obtain the "withdrawal of excess contributions" from the HSA custodian, and never from the employer, so your W-2 never changes in any case.

If you did not have any excess contributions in fact, but took money out anyway, then you have made a distribution for reasons other than qualified medical expenses. Such distributions are taxed as ordinary income and have an additional 20% penalty.

If this is the case, that TurboTax did not report an excess, so you actually did not have an excess and should not have withdrawn it, then thing to do is to contact your HSA custodian and report a "Mistaken distribution". If they accept this (be nice because they don't have to do this), then you will need to sign a form and send them the money (from the 1099-SA) in return, which they will redeposit into your HSA. Trying to fix this any other way will foul up the paperwork for the HSA and your tax returns over time.

[vernitron]

Thanks for the reply. I didn't include all the context in my posts. I applied for Medicare in Jan this year, so I knew my coverage was backdated for 6 months and knew I contributed more than the allowed amount for a half year of HDHP coverage. However, I think I figured out how to enter things correctly. On the TT page where it asks what type of HDHP coverage you had for 2025, you must answer "different plan types" if you were on Medicare at any point in 2025. I did not select this option at first because I had maintained my Family HDHP coverage all year and selected that option. Once "different plan types" is selected, more options appear on the next screen. On the next screen "Medicare or None" can be selected for the months that Medicare was active. Selecting the months I had medicare finally changed the totals.

[BillM223]

So you are saying that you turned 65 in or about July 2025? Note that backdating Medicare by 6 months happens only if you apply to start after your 65th birthday, and the backdating is back to your 65th birthday, and in no case is the backdating more than 6 months. Therefore if your 65th birthday was, for example, in January 2026, then there would be no backdating, and you would mark each month of 2025 as Family.

On the TT page where it asks what type of HDHP coverage you had for 2025, you must answer "different plan types" if you were on Medicare at any point in 2025.

The above is true.

On the next screen "Medicare or None" can be selected for the months that Medicare was active.

The above is true.

You seem to understand the process. However, I just want to confirm that in the end that TurboTax did report excess contributions, and that that amount is what you withdrew from your HSA. Furthermore, I want to confirm that the excess contributions were added automatically to line 8f on Schedule 1 (1040). Unless TurboTax reports the excess, this add-back will not happen.

[vernitron]

I delayed signing up for Medicare until well after my 65th birthday. Yes line 8f was updated. I think it is unclear which selection is correct on that particular page, because I did have a HDHP all year make and that is what I selected. It would be helpful if TT clarified that in the language at the beginning. Thanks for your help.