I had a life change event last year. When the life change event occurred, my employer assigned me to a HDHP and I contributed 6750 to the HSA. My employer mistakenly assigned me to this plan. I wanted a HRA that was not HSA eligible. After talking with my employer, they back dated my healthcare plan so it would be the HRA the entire year. Once this happened, I closed my HSA and withdrew all funds - 6750. My W2 list 6750 in the 12W box. How do I pay taxes on this amount but not face any penalties???
My Deductibles and OOP Max were resetting mid year with the HSA so that was not the best choice.
So in Turbotax, when you enter your W-2, the contribution will be brought in automatically from the W-2 and will be ineligible. When you run the 1099-SA interview, you will indicate that you were ineligible, but you had a return of excess contributions. That amount is added back to your taxable wages but you won't owe a penalty.
When you withdrew the HSA money, did you specifically tell the bank that you were withdrawing access an allowable contributions? Or, did you just make a regular withdrawal?
So in Turbotax, when you enter your W-2, the contribution will be brought in automatically from the W-2 and will be ineligible. When you run the 1099-SA interview, you will indicate that you were ineligible, but you had a return of excess contributions. That amount is added back to your taxable wages but you won't owe a penalty.