HSA over payment

Forum|Forum|4 years ago
February 3, 2022
2 replies
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I have an high deductible health plan for myself and my son with an HSA. My wife has a separate high deductible plan and HSA.

I contributed 6,175 in 2021 as this is under the 7,200 limit for family coverage.

My wife contributed 2,080 in her separate HSA under separate health plan.

Our employer contributed 1000 to mine and 500 to hers.

TurboTax states that I have over contributed by $2,605. Is this correct? How is this considered over contributed?

Thanks,

TurboTax Home & Biz Windows

BillM223

Level 15

When one spouse has a Family HDHP policy, then the IRS considers that both spouses have a Family plan for purposes of calculating the annual HSA contribution limit. This is not obvious from the IRS' instructions.

So because you have a Family plan, then you and your wife share the $7,200 annual HSA contribution limit. That is, you two can contribute $7,200 to your HSA or she can contribute $7,200 to her HSA or you can split it any way you like. What you can't do is contribute to your HSA based on a Family plan while your wife contributes separately to her HSA as if she were under a Self-only plan.

So your contributions were $6,175 + $1,000 = $7,175, while you wife's contributions were $2,080 + $500 = $2,580.

Your numbers are a bit off (or I am reading them wrong). Your aggregate contributions were $9,755. This should have caused an excess of $2,555 (7,175+2,580 - 7,200), Either your reported excess of $2,605 is not right or one of your reported contributions is not right.

I know that this discussion about shared HSA contribution limits is not obvious, but we do see this every year.

P.S. I am assume that neither one of you is 55 or older? That would change the math a lot.

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Mike9241

Level 15

the family max, assuming no one is 55 or over, including any matching employer contributions is $7,200

6175+2080+1500= 9755

max 7200

overcontributed $2555 (not sure why there is a $50 difference)

your options leave the excess in and pay a 6 % penalty. then you must under contribute in 2022 by the 2021 over contribution or again be subject to a 6% penalty.

draw the excess + any earnings thereon out by 4/15/2022. the income is taxable. make sure you tell the trustee you're withdrawing an excess contribution so the reporting form sent to the iRS is correct.