I had excess HSA contributions in 2022, removed before tax day. Didn't get a 1099 till Feb'24. Form 8889 (2022) shows excess, no removal, no extra tax. How do I fix this?

[lilli2]

When I took the distribution, I did inform my broker that it was related to an excess contribution and I have documentation of that. 

Do I need to amend my 2022 return using the 1099 I received in 2024? Won't the IRS think the distribution applies to 2023? 

Not sure how my 2022 tax return passed the error audit this way, but it did. 

[BillM223 · Accepted solution]

No, you are all right.

You had an excess HSA contribution on your 2022 return, and you contacted your HSA custodian to have that amount removed before April 15, 2023, right? And you asked to remove the excess in early 2023, right?

So it is normal that the 1099-SA would not arrive until late 2023 or early 2024. You have several tax consequences:

On your 2022 return:

1. If the excess was due to employer contributions, then TurboTax automatically added it back to income on Schedule 1 (1040) on line 8f.

2. If the excess was due to your personal contributions, then the deduction on line 13 on Schedule 1 (1040) is reduced automatically by that amount.

3. The earnings on the excess that you will owe tax on will not be due until your 2023 tax return - the one you are doing now in early 2024. 

In short, TurboTax automatically adjusted your Schedule 1 (1040) on your 2022 return, and the 1099-SA for the withdrawal of the excess should be entered on your 2023 return. Everything is OK.

[lilli2]

Bill, got it, thank you!

All of what you said is correct except that the excess was removed on April 17, 2023, but Mr. Google tells me that tax day was on April 18 in 2023, so I think I made it in just under the wire.  (Gratitude to Fidelity!) I had an extension last year, so I was able to include this in my return. You are right, I find the adjustment on line 8f.

Thanks again!