When I finish entering my medical expenses I get the screen. Distributions Received. Verify the amount you withdrew from your Archer MSA or HSA to pay for medical expenses. If this amount is incorrect, edit your Form 1099-SA by going back to HSA/MSA area in Wages & Income. Note: Be Sure to include your medical expenses covered by your MSA/HSA distribution as medical expenses on the previous screens, but do no include amounts that will be reimbursed with distributions in a later year.
When entering your 2017 medical expenses, on the page where you are asked to enter any medical expenses not previously asked for, enter a line item for the amount of your HSA distribution that was used to reimburse yourself for medical expenses paid in 2016 (but not included on line 1 of your 2016 Schedule A).
(Note that you can only use an HSA distribution to cover medical expenses incurred after the establishment of your HSA.)
I had a HSA distribution in 2019 , part of it was to pay for 2018. medical expenses. I am on 2019 premier and I don't see a place for "on the page where you are asked to enter any medical expenses not previously asked for, ". 1099-SA showed 2k distrbutions 2019 . W2 shows 1k HSA 2019. but, I had 1k from 2018 HSA. Turbotax says i have excess employer contributions withdrawn $1k. I am looking for a place I can enter 1k distrbutions in Jan. 2019 was for 2018 medical expenses. Is the 1099-SA problem?
First, let me say that the amount that is distributed (i.e., spent on medical expenses) has nothing to do with your contribution limit or the amount of excess contributions.
There are several reasons why TurboTax might think that you made an excess contribution, but none of them have to do with your distributions.
Look at the bottom of this answer for the long list of possibilities.
"I am looking for a place I can enter 1k distrbutions in Jan. 2019 was for 2018 medical expenses."
The reason that you cannot find it is because there is no such place. The IRS requires you to report the HSA distribution in the year they are made. The IRS does not care (or, at least, they don't ask), what year the expenses were originally made.
This is because HSAs are persistent, that is, any unspent amounts carry over year to year. As dmertz mentioned about, you are permitted to pay for any qualified medical expense out of your current HSA that was incurred after your HSA was originally funded. You are not required to do any year over year reconciliation.
Yes, this makes it appear that you are taking a 2018 expense as a medical expense on Schedule A in 2019, but you're really not. As dmertz explained, entering the amount of the 2019 distribution on your 2019 Schedule A is just a way to ensure that the automatic transfer of the HSA distribution to Schedule A does not throw the balance off. This amount will not reach the IRS.
***Now as for your current year excess contribution***
I understand that the following list is long, but these are all reasons that taxpayers get excess contribution messages.
If you find that your situation is not one of these cases, then please make a new post in which you indicate:
- your HDHP coverage and for how many months
- your spouse's HDHP coverage and for how many months
- your HSA contributions (both through your employer and directly to the HSA)
- your spouse's HSA contributions (both through your spouse's employer and directly to the HSA)
- the amount of the excess
- whether or not either of you went on Medicare and what month
- whether or not (and the amount) of carryover of excess contributions from 2018 for either of you
One of the purposes of the HSA interview is to determine your annual HSA contribution limit.
As you probably know, the maximum limits in 2019 are:
- $3,500 - individual with self-coverage
- $7,000 - individual with family coverage
- If the HSA owner is 55 or older, then you add $1,000 to these amounts.
However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced.
There are several major culprits for excess contributions (other than just actually contributing more than the limit).
First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message.
There are questions all the way to the end of the interview that affect the annual contribution limit.
Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen.
Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen. Don't enter the code W amount anywhere on the return other than on the W-2 page.
Third, if you weren't in HDHP coverage all 12 months, then the annual contribution limit is reduced on a per month ratio. NOTE, this means that you have to indicate when and under what type of HDHP plan you had. Be sure to answer the questions on the screen entitled "Was [name] covered by a High Deductible Health Plan in 2019?".
Fourth, if you had a carryover of excess contributions from 2018, then this carryover is applied to 2019 as a personal contribution, which could cause an excess condition in 2019 as well. But note: if you had an excess contribution in 2018 but cured it by withdrawing the excess in early 2018, then do NOT report an "overfunding" on your 2018 return.
Fifth, the Family limit ($7,000) is for the aggregate of contributions by both taxpayers, even if both taxpayers have their own HSAs. That is, one taxpayer can’t contribute $7,000 to his/her HSA and the other contribute $3,500 to the other HSA – the $7,000 limit applies to the aggregate of all HSA contributions credited to the family (in this case, the excess contributions would be $3,500).
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Thank you so much for your time. I am still not able to find out what is the problem. I copied everything about HSA in my tax to new post. if you could take a look to see if you need any more info. thank you again ! https://ttlc.intuit.com/community/tax-credits-deductions/discussion/why-i-have-excess-employer-contr...
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