HSA over funded by $4000, I then requested the money back which I recieved. I now have a W2 showing $8000 and a 5498-SA showing $4000. Trustee refuses to send 1099-SA ??

[HelenC12]

No, TurboTax will not e-file a return that has errors. 

If Form 8889 has a negative number and that is not allowed, I would delete all forms and worksheets related to the $4,000 HSA contribution and re-enter using the information given by BillM223.

• If you're using TurboTax Online software and need to delete a form, click here.
• If you're using TurboTax CD\Download software and need to delete a form, click here. 

[trellerbundy]

Hello HelenC12, I did delete the forms and follow all the steps BillM223 gave me but one of his steps was to show the -$4000 in the HSA to reflect that this was the true final amount left in my HSA ($8000-$4000).

We fixed the income by increasing the misc income by $4000 and now need to reduce the HSA amount as the W2 has $8000  which is not correct. (It is correct as far as my employer goes as they transferred $8000 to my HSA but I since asked for $4000 to be reversed, the reversal happened as an adjustment though, and was not sent to my employer but to me and I didn't receive a 1099-SA either which is why we have the disconnect).

[RobertB4444]

@BillM223 was right about that -4000 entry fixing the problem because of the bottom line but there is no way for that entry to be made and not generate an 8889.  And an 8889 can't be negative.  So that entry fixed the issue but created another one.

The government has put you in a pickle.

The negative 4000 entry still needs to be made but not in the additional HSA contributions where you have it.  Go back and clear that entry.

Now, this next part is going to be weird.  Change your W2.  Change the W amount from 8000 to 4000 OR even better, if you have another box 12 input section available, put a second W in there and put a negative 4000 in.

This will change the HSA deduction on your W2 to what it should be ($4000) and you have already changed your income by adding that $4000 through the miscellaneous income entry.  This gets all of your numbers to the correct place that they should be for 2022.

The downside is that the IRS doesn't know that.  So save all the records related to this.  Save all the proof that you pulled the money, save any emails that are related to this (print them) save all of the bank records showing the deposits and withdrawals.

Probably nothing comes of this.  You're doing all of this correctly, after all.  But possibly you get a letter from the IRS asking questions about this.  At which point you write them a letter of explanation and copies of everything in your file folder.  You're prepared.

@trellerbundy 

[trellerbundy]

Thanks for this.

TurboTax would not let me enter a negative W code in box 12 so I reduced the W2 box 12 W amount by $4000 like you suggested. The Fed and State tax come to the same as when I did BillM223s fix so that's good.

Turbotax asks if I had uncommon situations on my W2, one of the options is Nonstandard W2 (handwritten, modified or altered). Should I select that or is this if the employer makes a change?

Trevor.

[trellerbundy]

Thanks for the help everyone, does anyone know what to do about my last question asking about the uncommon W2?

Thanks

Trevor.

[SharonD007]

If you select the question mark at the end of the situation, TurboTax will give you. more details which are below:

What's a nonstandard W-2?

by TurboTax•Updated January 25, 2023

W-2s can have a variety of formats, but they are typically computer-generated by your employer or a payroll company.

You have a nonstandard W-2 if your form is

• Typewritten (meaning it was created with an actual typewriter)
• Handwritten
• Altered, changed, or marked up in any way

You should make that selection only if you received the W-2 from your employer in a nonstandard format.