Why does Turbotax show an excess contribution to my HSA when there is not one?

[FredJH]

I don't know why anyone is so adamant about defending Intuit with this version of TT. I've been using TT for almost ten years and never had this problem, and I encountered it in two spots.

I may not have needed to remove and re-enter my HSA contributions, it may have been something else that happened along the way, like SAVING and then RELOADING the project to  make TT interpret/display the correct information.

It's not the values I entered when saving and reloading fixed the problem, now is it? This happened both with HSA contributions and monetary donations to charities. I'm a software developer for nearly four decades - that's a bug.

Imagine using a word processor and bold-facing some text, and it doesn't show. Then you save, and reload the document and suddenly it displays correctly - that's a bug. This was the same kind of thing.

If it didn't happen to you, great! Good for you.

[CowboyMama]

We had this exact same issue.  We followed this work-around and it fixed the problem for us also

[flowcat]

I had hard time to deal with the same issue, and finally I figured it out.

When I imported W2 from ATP, TurboTax messed it up.

After deleting auto-imported W2 and upload again from the pdf version of W2,

everything got fixed.

[ricerx]

Definitely seems to be a bug in the software.  I ran into the same issue saying I "over funded" (tried several times), but I did not, and did not have a 5329 form for 2023.  I went back to my w2 that was imported and re-answered everything exactly the same, but this go around, when going through the HSA portion exactly the same way, it doesn't say I over funded.

To clarify, I did nothing different other than just re-running through my imported W2 with the exact same answers.  Everything in the HSA portion was also answered exactly the same.  

[kkbb]

Same issue for me... I completed the questionnaire just like previous years, but it's now saying:

It looks like (my wife) has an excess contribution of $4,150. This amount is being taxed an extra 6%.

[BillM223]

kkbb

We don't have enough information to make any sort of definitive answer to your case.

It is easy to accidentally enter HSA data that shows that you overcontributed to your HSA. 

Please read the following:

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

As you probably know, the maximum limits in 2024 are:

• $4,150 - individual with self-coverage
• $8,300 - 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.

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 HDHP coverage all 12 months, then the annual contribution limit is reduced on a per month ratio. NOTE, this means that you have to indicate when and under what type of HDHP plan you had. Be sure to answer the questions on the screen entitled "Was [name] covered by a High Deductible Health Plan in 2024?".

Fourth, if you had a carryover of excess contributions from 2023, then this carryover is applied to 2024 as a reduction to the 2024 HSA contribution limit, which could cause an excess condition in 2024 as well. But note: if you had an excess contribution in 2023 but cured it by withdrawing the excess in early 2024, then do NOT report an "overfunding" on your 2024 return.

Fifth, the Family limit ($8,300) is for the aggregate of contributions by both taxpayers, even if both taxpayers have their own HSAs. That is, one taxpayer can’t contribute $8,300 to his/her HSA and the other contribute $4,150 to the other HSA – the $8,300 limit applies to the aggregate of all HSA contributions credited to the family (in this case, the excess contributions would be $4,150.

@kkbb 

[kkbb]

Thank you... the fifth one explains it for my case. My wife and I have our own HSAs, and we exceeded the total family limit.

[Ebertsj]

While all this info is helpful, it does NOT address the issue MANY, MANY of us posting here have faced. And while cannot speak for other, have to say for myself in over tens years of using Turbotax,  and going thru the HSA interview, and knowing full well the importance of answering YES to the “are you enrolled jn a high deductible plan” did NOT inadvertently answer this question wrong, as suspect most others did not. 

So, go ahead and state “not enough information”, we, the many users taking our time to provide feedback have MORE than enough information…appears from now on we all have to have our own checklist to review our returns OUTSIDE the TT check to make sure we did not get dinged for this.