HSA excess contribution

Forum|Forum|2 years ago
March 28, 2024
1 reply
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TurboTax is telling me that I am having an excessive contribution to my HSA of $7,750. On my W2, Box 12 W is showing 8,750.00 (this includes $1000 employer contribution). The maximum for a family contribution for 2023 is $7750, and I had additional $1000 as a catch-up contribution (older than 55). I am not sure how Turbo Tax see I am having an excessive contribution and asking to withdraw money from my HSA. My filing status is Married filing separate.

Mike9241

Level 15

did you get to the section for the HSA form 8889? until then Tutbotaxx thinks the contributions reported on your w-2 are an excess. To not have an excess you must either be covered by a High Deductible Health Plan (no FSA, no medicare, no other full coverage health insurance that isn't a high deductible plan ). for every month of the year. There is a special rule if you were not covered every month by a HDHP but you were on December 1st that allows a full year's contribution. On the Turbotax screens for the HSA, you must indicate the type of coverage you and the months you had it. Do not enter your payroll deduction as personally made. your deduction comes from the fact that your gross wages in box 1 of your w-2 was reduced by your HSA contributions,

to get to the form go to the deduction and credits section

scroll down to medical subsection

click the link to start or update on the line that has "HSA"

MH-20Author

Level 3

I finished the "Wages & Income" section where I included the amount of 8,750 in my W2 box 12. I also went through all the Deductions steps including the Medical section for HSA where I entered Form 1099-SA ($2,417.13) and then I checked on "Yes, I only used it for medical expenses", then I checked "did not inherit this HSA", then next screen showed $8,750 for my "2023 employer and payroll contributions", I had $0 for "Any contributions you personally made", then selected Yes for "I was covered by an HDHP" and selected "I was covered by a Family plan every month on the year", then selected No for "Did you overfund your HSA in 2022" (since year 2023 was my first year having an HSA account). Then, Turbo Tax displayed "It looks like you have an excess contribution of $7,750" and it is asking me to choose from three different options of withdrawing or not withdrawing full/some of the amount by April 15,2024. Did not know where I should go from there.

See below for Summary:

Deduction $0

Total distributions $2,417

Taxable distributions $0

Taxable earnings on excess contributions $0

Taxable employer contributions $7,750

Tax-free employer contributions $1,000

Excess employer contributions $0

I clicked on "Forms" and I see under the "Forms in My Return" section that Form 8889 is Not Done. I did not come across Form 8889 and don't know where is that in the process. Please help.

See attached below for more information.

[PII image removed]

Thanks for your time!

MH-20Author

Level 3

The initial problem is hat TurboTax thinks that you have contributed 8,750 to an Archer MSA, which I assume that you did not (see line 4). Contributions to Archer MSAs are grouped with contributions to your HSA to calculate any excess.

So how to fix?

1. Go back into the HSA interview and make sure that you did not check that you have an MSA (the first screen).

2. Second, make sure that you did not have an entry with a code of R in box 12 on your W-2.

3. Next, since you appear to have the desktop software, go into Forms mode, look at the Forms list on the left, then click on form 8853. Delete it (button is at the bottom of the panel).

4. Now go back through the HSA interview, and see if it's OK.

5. Go through the Federal Review and see if there are any complaints.

6. Come back here if there are.

We are going to delete your screen shots, because they contain personally identifiable information (PII). We love screen shots, but please redact any personal information.

I didn't have MSA checked on the first screen (only HSA was checked). I also checked and found no R in box 12 on my W2. I went to the Forms on the left and found that Form 8853 had an X check on the NO option for line B "Were any employer contributions made to your MSA". As you suggested, I deleted Form 8853 (Archer MSA) and then went back to the HSA interview, but still had the same message that I am having an excess contribution of $7,750 (I checked and found that the form 8853 was re-created with an X as stated earlier). I am not sure where this amount on line 4 is coming from.

Thanks for your response.