I have a HSA that was overfunded in 2021 I have not had HDHP 2022 or 2023, Turbotax Review fails because it things I do!

[eoltman]

I am convinced that there is a bug in Turbotax - please read!

Here are the details:

Under Personal --> Detections & Credits --> Medical Expenses I say "yes" to medical expenses in 2023

"Your HSA Summary" - shows all zeros for Filer and Spouse ..."Done"

What type of HDHP Did filer have on December 1, 2022 - "None" + "Done"

What type of HDHP Did spouse have on December 1, 2022 - "None" + "Done"

Did you spend more than $14,266 on medical expenses in 2023?  "No"

Did you receive Form 1095-A for your health insurance plan? "No" + "Continue"

Make sure to enter your 1095-A before you file. "Continue"

When I go to Review and Turbo tax finds an error on 8889 - no entry for line 1:  This makes no sense as I do not have coverage for an HDHP.  

Note: Line 2  "HSA Contribution you made for 2023...." shows 194 - which also makes no sense because the excess contribution was for 2021 - this is the carryover value from my 2022 turbotax.  I made not contribution in 2023 and I was not covered by HDHP in 2023 - what do I do?

Note: I also tried a different path.  When shown the HSA Summary with alll zeros, If I choose "Edit" I get:

Tell us about health-related accounts you had in 2023:

This show HSA for myself checked and all other boxes are unchecked.  I click "Continue"

Did you use your HSA to pay for anything in 2023  - "No"

Now work on my HSA "Continue"

Did I inherit this HSA? "No"

Did I put money into an HSA in 2023?  "No"

Did I have nedicare at any time in 2023 "No"

Was I covered by a HDHP in 2023? "No, I did not have coverage" Continue

Enter Last Year's excess contribution

   Enter the amount from line 48 of 2022 Form 5329 (Note: This was an excess from 2021!)  The value was prefilled - 194   "Continue"

You may want to withdraw money from your HSA - The middle option "We'll withdraw some of the excess contribution by April, 15 2024 was selected (?!) even though right below it states "Unfortunately, all of your excess contribution is caused by a prior year excess contribution.  It is too late to remove any of this excess contribution.  So I select "No, we're not going to make a withdrawel" + "Continue"

What's the total value of all your HSAs? - I enter the value, then click "Continue"

Your HSA summary: all zeros for myself and my spouse - "Done"

What type of HDHP did you have on December 1,2022 "None" + "Continue"

What type of HDHP did Spouse have on December 1,2022 "None" + "Continue"

Did you spend more than $14,266 on medical expenses in 2023? "No"

Did you recieve Form 1095-A for your health insurance plan? "No, I didn't receive form 1095-A" + "Continue"

Make sure to enter your 1095-A before you file. "Continue"

As before  when I go to Review Turbo tax finds the same error on form 8889 Line 1

I am fairly convinced there is a bug in Turbotax.  Please advice

[BillM223]

First, the excess contribution carryover from 2021 to 2022, is carried over again to 2023. This will keep happening forever until you get rid of it. 

You get rid of it in one of two ways:

1. You go back under HDHP coverage and then treat the 194 as a personal contribution, so that it will be used up in that year.

2. You ask the HSA custodian to distribute $194 to you, and you report on the 1099-SA interview that this was not for qualified medical expenses, so this will be added to Other Income and penalized 20%.

"When I go to Review and Turbo tax finds an error on 8889 - no entry for line 1" - This is because the Review is confused, on why you have an 8889 when you don't have any HDHP coverage. Of course, your situation is a perfect example of how this can happen but this is on a long lists of enhancement requests.

In your case, because you said that you had NO coverage, then in the Review, you can safely answer Self to the line 1 question, because TurboTax already knows that you had no coverage, and this will get you past the Review problem.

[eoltman]

Thank you for solving the second part of my question: Getting beyond the turbotax error on line 1 of form 8889. That worked, after also checking the 12 "None" boxes on Line 3 Smart Worksheet.

The first part of your answer I did not really understand: "go back under HDHP coverage and then treat the 194 as a personal contribution, so that it will be used up in that year"

I will try request that the custodian of my HSA account to distribute at least $194 - I should have qualified medical expenses - for 2024

Ed