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posted Apr 15, 2025 10:44:29 AM

I am 55 years old, making an additional "catch-up" contribution of $1k to my HSA. Turbotax claims I have an excess contribution of $1k. What can I do?

Turbotax says I either need to withdraw the $1k or be taxed an extra 6%. This is a Turbotax bug, right? How to fix it?

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1 Replies
Expert Alumni
Apr 15, 2025 12:45:18 PM

No, it's not a TurboTax bug.

 

When did you turn 55? in 2024? The additional HSA contribution limit of $1,000 for 55+ is prorated for the year in which you turn 55.

 

Furthermore, the 6% penalty is assessed ONLY if you tell TurboTax that you are not going to withdraw the whole excess on the screen on which TurboTax tells us that you have an excess. Any amount of the excess that is not withdrawn is carried over to the next year to be used as a "personal contribution" (line 2 form 8889).

 

So, we need some more information, like your birthdate in 2024, the type of HDHP coverage you had in 2024, how much you (or anyone) contributed to your HSA in 2024, whether or not you have an excess carryover from 2023, and so on.