My husband has two HSA's. He exceeded the HSA limit due to his employer's surprise $500 deposit from them on 12/31/21 which hard posted at one of his HSA banks on 1/4/22 along with a $40 payroll deduction from 12/31/2021. HR said their $500 deposit was meant for 2022 but was sent too soon. They aren't going to fix it. We didn't find out about this until he got a 5498 from the bank showing $540 contribution made in "2022 for 2021" (their $500 plus husband's $40). His W2 box 12 shows $2680 which also includes the 12/31/21 $40 deposit (so it was counted for both '21 and '22 for 2021).
My husband called the bank and asked if he could do an excess contribution withdrawal and they said no because he didn't exceed the limit at their bank (they didn't care about the contributions he made at the other bank, which count as well). He asked if he could have the $540 credited to "2022" instead of "2022 for 2021" and the customer service person said yes (oops) and told him exactly how to fill out the paperwork, which he submitted. Turns out they were wrong.
I checked his HSA bank today and they have a "corrected" 5498. They still have $540 in "2022 for 2021" but they said his "2021" amount was now $2100! They took the $540 amount out of the contributions in "2021 for 2021" even though it was never there in the first place. We talked to a bank supervisor who said they sent the $540 back to his employer and that they (employer) would give him a check for $40 which we would have to pay taxes on). She would not believe me that the $2011 "contributions in 2021 for 2021" amount was wrong and they won't correct it on the 5498.
How do we fill out the HSA form 8889 now? What happens with the $500 they sent back to his employer? Do we have to pay taxes on that even though his employer has it? Will it be considered a non medical withdrawal? How do deal with the $40 they sent to his employer? Is that also a non-medical withdrawal? That $40 is also still wrongly added in for 2021 contributions as well as 2022 for 2021. His HR never fixes any mistakes!
I wish we would have just paid the penalty for over funding and not tried to fix it!
