2021 HSA Max Appears Wrong: When entering $7,200 for a Family HSA, I'm being told I over-contributed $100. However, $7,200 should be 2021's max. Am I missing something?

[meisjp]

TurboTax prompts to either withdraw the "excess" $100 or be charged an extra 6% tax on it. Might be a bug in the early version of the software but want to make sure that's all it is...

[rjs · Accepted solution]

That's all it is. The early releases of any tax software for the new year are really just a rough draft. A lot of things aren't included yet, and a lot of things haven't been updated yet from the previous year. These things will be taken care of in updates over the next couple of months. The IRS has not even announced a date when filing 2021 tax returns will start, but it will be sometime in late January.

[Critter-3]

Yes ... I have seen spots where the input screen is still stuck in 2020 but the LEARN MORE link has the 2021 info ... much of the program is not up to speed yet which is normal.

Although the downloaded program becomes available every year sometime in  November with the online following sometime  in December  they are NOT fully operational programs ... they are only preliminary versions until the IRS issues all final forms and regulations.  The final program and the state programs are never fully operational until late January at the earliest.  

ANY tax software released by any company prior to about January 15 is only released for marketing and market share.  No program is complete and ready to file until the IRS approves their final forms and then individually reviews each program's implementation of the form.  And some tax situations aren't able to be filed until February or March, again mostly due to IRS delays.

[jbowler]

Go to "forms" look at 8889-S and, in particular the Line 3 smart worksheet.

It has the wrong number.

Right click on the "7,100" and, 12 times, override it to "7,200".  I just tried filing a bug report with TurdoTax; no chance.  Dumbest thing I have ever seen; it's been 7200 way since February.

[Critter-3]

AGAIN ... the early version of the program is always buggy.  Click on the REVIEW tab to see when that form in your return should be ready.   Looks like 1/27 is the estimated date (dates subject to change). 

Or watch here :   https://ttlc.intuit.com/community/forms/help/irs-forms-availability-table-for-turbotax-individual-pe...

[Rmgresco]

Same thing happened to me.  I already filed my return, too.  TurboTax guarantees our maximum refund, so I am hoping that pull through and correct this for me.  This type of error can cost them a pretty penny.  They need to fix it quick.

[jbowler]

Go check 8889-S (line 3 smart worksheet, sub-lines A1-A12).  After the 2/9 update it now shows $7200 (after removing the override, if you entered it).  I trust you saved a PDF of your original; the update will change those lines under your feet and I'm not sure how that will mess up any attempt to file a correction.

In your case it's going to make only a small change to the refund - $200 times your marginal rate, so almost certainly less than the cost of TurboTax, however the main cost is that you lose $100 of pre-tax contributions to your HSA if you did what TT told you and pulled the money out; so far as I know you can't put it back in.

Their guarantee is like those "lifetime" guarantees.  They make it because no one claims it, it just costs too much time and effort to claim it, unless you get off on listening to hold music.

[BillM223]

First, by the time TurboTax was able to deliver any tax returns to the IRS for e-filing, any HSA issues like the $7,200 annual HSA contribution limit had long been corrected.

Second, the comments about changing numbers in the return applies only to taxpayers who are using the CD/download TurboTax software, which a majority of our users do not. In the Online product, such plugging of numbers is not possible, and for the reason I gave above, would not be necessary in this case anyway.

@Rmgresco