I overfunded my HSA in 2025, however made correction by requesting return of excess in the same year. Yet my W2 shows overfunded amount. Should I put corrected amt?

[charismasul]

In other words, do I still need to pay excess contribution penalty?

[MaxA1]

No.  Enter the amount as shown on the W2.  Since you withdrew the excess contributions in the same year they were made, you should have received a 1099-SA with distribution code 2 on box 3.  Code 2 indicates the distribution is due to excess contributions. The amount will be included as income on your tax return but won't be subject to penalties.

Once you've received your Form 1099-SA, follow these steps to properly report your HSA distributions:

1. Go to the Wage and Income Summary
2. Go to Less Common Income
3. Start the 1099-SA, HSA, MSA section
4. Select HSA
5. Follow the prompts to enter your HSA distributions

[user17740480819]

Hello, I overfunded my HSA in 2025 and corrected it in 2026. I haven't filed my taxes yet. Should I enter the corrected amount when I file taxes?

[MaxA1]

You will‌ still enter the original amount and indicate in the 1099-SA section that you will withdraw the amount in 2026 before the deadline (including extensions).

[mpweis]

Hello!

I have a similar situation to user[phone number removed]. 

I have been struggling with Turbo Tax online for tax year 2025 on how to enter my corrective distribution without the evidence of it in a tax form (that is, a 1099-SA). I've been through the 1095-SA sections multiple times.

In my case the overfunding was against the family contribution limit in 2025, which I corrected with a distribution from my HSA to my checking account a week or so ago. My spouse and I didn't overfund our individual accounts. My HSA provider informed me that my 2026 1095-SA will include this distribution when generated in 2027. Does Turbo Tax automatically count this overfunded amount as taxable income? Also, do I wait until I do my 2026 tax return to prove this corrective distribution was handled in a timely fashion to avoid any penalty? The only proof I have is a direct deposit advice receipt documenting the corrective amount. I have struggle to find where to enter this corrective distribution in the guided entry of Turbo Tax online.

[mpweis]

Please ignore my previous post. I was under the false impression that with my wife and I both having an HDHP (one of them being family coverage) and both of us owning our own HSA, and finally both of us being at least 55 years old, that as a whole we could contribute $1,000 above the family contribution limit of $8550 for 2025. I've just learned we each can contribute an additional $1000 to our own account, as long as we don't exceed individual limit of $4,300+$1,000 and collectively we don't exceed $10,550. I thought our family contribution limit was $9,550. We therefore did not overfund out HSA accounts. No wonder the HSA Summary in Turbo Tax online reports that my taxable earnings on excess contributions is $0. Phew.