Software is calculating tax on excess HSA contributions when I did not have excess contributions. Anyone else having this issue?

[mkmerideth]

It is showing my full contribution as excess on form 5329, however when I am going through all the prompts it specifically says that my contributions are under the limit and I have no excess contributions. Yet tax is still being calculated on the full amount.

[BillM223]

Generally, if your full HSA contribution is showing as taxable, it is because your HDHP coverage has not been correctly entered. You must have proper HDHP insurance coverage in order for HSA contributions to be non-taxable.

Can you see your form 5329? If so, please look at form 8889-T and tell us the values on 

Line 2

Line 3

Line 9

Line 14c

Line 16

Line 18

Also, are you filing married joint, and does your spouse have a separate HSA? If so, please list the same numbers for form 8889-S.

I believe that we can quickly straighten this out if you will work with me.

[Opus 17]

First, if you made contributions by payroll, they are captured automatically from your W-2.  Don't enter them again when asked.  You are only being asked about extra contributions you made out of pocket.

Then, make sure you reviewed the entire HSA interview and indicated that you had qualifying HDHP insurance all year and no other disqualifying coverage. 

[mkmerideth]

It looks like it may have been a Turbo Tax glitch. After posting my question, I logged back in and they said that they were updating the HSA forms and I couldn't complete my return until that was done. I logged in a few days later and it was fixed and appropriately not counting my contributions as excess contributions. I noticed that it had not been saving my information on which months I had been covered by different types of high deductible plans in 2025, so I think perhaps the system was not showing that I was covered by a high deductible plan. It now saves my information and is calculating correctly. Thank you!