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New Member

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

It says we have an excess of $4000 (from our W2) but at year end we had only $400 in HSA.  

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Level 13

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

The "excess contributions" is not how much you have in the account, but the amount by which you exceeded the annual HSA contribution limit.

You do not withdraw your excess contribution by spending it.

It is quite possible that you accidentally indicated to TurboTax that you had an excess contribution when you didn't - this would be worth checking on first.

 

One of the purposes of the HSA interview is to determine your annual HSA contribution limit.

 

As you probably know, the maximum limits in 2019 are:

 

  • $3,500 - individual with self-coverage
  • $7,000 - individual with family coverage
  • If the HSA owner is 55 or older, then you add $1,000 to these amounts.

 

However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced

 

There are several major culprits for excess contributions (other than just actually contributing more than the limit). 

 

First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message. 

 

There are questions all the way to the end of the interview that affect the annual contribution limit.

 

Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen (see screenshot below). 

 

Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen (above). Don't enter the code W amount anywhere on the return other than on the W-2 page.

 

Third, if you weren't in the HSA all 12 months, then the annual contribution limit is reduced on a per month ratio. 

 

Fourth , if you had a carryover of excess contributions from the previous tax year, then this carryover is applied to the current tax year as a personal contribution, which could cause an excess condition in the current tax year as well. But note: if you had an excess contribution in previous tax year but cured it by withdrawing the excess in early in the current tax year, then do NOT report an "overfunding" on your current tax year return.

Finally, since it appears that you are married, sometimes spouses don't realize that the $7,000 annual limit is for the family, not each taxpayer. If one taxpayer contributes $7,000 and the other on a Self-only plan contributes $3,500, then the couple has contributed $3,500 in excess. Unfortunately, this would be a true excess contribution and would have to be cured a different way.

 

[Edited 3/17/2020 4:39 pm CDT - updated for 2019]

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5 Replies
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Level 13

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

The "excess contributions" is not how much you have in the account, but the amount by which you exceeded the annual HSA contribution limit.

You do not withdraw your excess contribution by spending it.

It is quite possible that you accidentally indicated to TurboTax that you had an excess contribution when you didn't - this would be worth checking on first.

 

One of the purposes of the HSA interview is to determine your annual HSA contribution limit.

 

As you probably know, the maximum limits in 2019 are:

 

  • $3,500 - individual with self-coverage
  • $7,000 - individual with family coverage
  • If the HSA owner is 55 or older, then you add $1,000 to these amounts.

 

However, these limits assume that you were in an HSA all year. If you left the HSA during the year or started Medicare or had one of a number of change events, then the limit is reduced

 

There are several major culprits for excess contributions (other than just actually contributing more than the limit). 

 

First, if you did not complete the HSA interview - that is, go all the way until you are returned to the "Your Tax Breaks" page - the limit still might be set to zero, causes a misleading excess contribution message. 

 

There are questions all the way to the end of the interview that affect the annual contribution limit.

 

Second, it is not unusual for taxpayers to accidentally duplicate their contributions by mistakenly entering what they perceive to be "their" contributions into the second line on the "Let's enter your HSA contributions" screen (see screenshot below). 

 

Normally, any employee who made contributions to his/her HSA through a payroll deduction plan has the contributions included in the amount with code "W" in box 12 on the W-2. This is on the first line on this screen (above). Don't enter the code W amount anywhere on the return other than on the W-2 page.

 

Third, if you weren't in the HSA all 12 months, then the annual contribution limit is reduced on a per month ratio. 

 

Fourth , if you had a carryover of excess contributions from the previous tax year, then this carryover is applied to the current tax year as a personal contribution, which could cause an excess condition in the current tax year as well. But note: if you had an excess contribution in previous tax year but cured it by withdrawing the excess in early in the current tax year, then do NOT report an "overfunding" on your current tax year return.

Finally, since it appears that you are married, sometimes spouses don't realize that the $7,000 annual limit is for the family, not each taxpayer. If one taxpayer contributes $7,000 and the other on a Self-only plan contributes $3,500, then the couple has contributed $3,500 in excess. Unfortunately, this would be a true excess contribution and would have to be cured a different way.

 

[Edited 3/17/2020 4:39 pm CDT - updated for 2019]

View solution in original post

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New Member

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

I keep getting an error saying I have excess contributions. I checked my W-2 and it shows I contributed $2.3K, which is less than the annual limit but it's saying I over-contributed by that exact amount. I have gone through the questions 15 times and don't know what is causing this. Any help would be appreciated!

Highlighted
New Member

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

Update: You must select the "Yes, I was covered by a High Deductible Health Plan" option.

Highlighted
New Member

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

I don't understand HSA  so what do I do just tell me.

 

Level 6

Turbo tax is telling me we have an excess HSA contribution, but our actual HSA does not have that amount in it. Do I say we withdrew it?

The HSA is handled in 3 parts in the TT program :

First the contribution:

https://ttlc.intuit.com/replies/4557768

https://ttlc.intuit.com/replies/4785646

 

Next the limitations screen to confirm you are eligible to make the contributions:

Until you complete the HSA portion of the TurboTax interview to establish your eligibility for an HSA contribution, TurboTax will treat the amount entered on the W-2 form as an excess HSA contribution.

https://ttlc.intuit.com/replies/4788059

 

And lastly any distribution:

https://ttlc.intuit.com/replies/4787864

 

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