IF w2 has $5150 has HSA contribution & Form 1099-SA has $4202.25 as HSA qualified distribution. How can TurboTax say my $5150 contribution is over limit and I owe taxes?

[cassynnc]

I did not have any overages in 2023 for the HSA.

[MindyB]

It depends- are you manually entering your HSA contributions made through payroll in the HSA entry in TurboTax? If so, you shouldn't do that as you will be double-counting your contributions. ‌You also need to make sure you have indicated you have a high-deductible health plan all year. 

According to Why am I showing an excess HSA contribution?, the 2024 maximum for both employer and employee HSA contributions was $5,150 if you were 55 or older at the end of 2024 and are covered by an individual (self-only) HDHP. ‌If you were older than 54, check these entries:

• Click on Federal Taxes,  Deduction & Credits
• Choose "add/edit" HSA, MSA Contributions
• You will see a page titled "Your HSA Summary" which will show any deductions already computed from your W-2  
• Choose Edit, Check the box for HSA, Continue
• You'll now see a screen that says "Here's what we have so far" with the information from the 1099-SA, choose "Edit"
• After the entry screen for the amount distributed, $4,202, continue and when it asks "Did you spend your HSA money on medical expenses only?" answer "Yes", if accurate. 
• Choose done and continue until you get to a screen that says "Let's enter your HSA contributions"
• In the box "Any contributions you personally made (not through your employer)" DON'T enter the amounts you contributed through paycheck withholding. It has already been considered through your W-2 entry.
• Continue on, and if you were covered by Medicare, you will need to indicate what months this was the case, as your contributions will be limited.
• Next, you will be asked if you were covered by a High Deductible Health Plan (HDHP) in 2024? You need to have been covered the whole year to be allowed to make the maximum HSA contribution.