TurboTax excess HSA contribution, even though there was not. The guide article was not helpful, as everything it suggests was already checked. Any help?

[KarenJ2]

The main reason you might get an 'over contributed' error for your HSA is that TurboTax picked up your HSA contributions from your W-2, and you also entered them again in the HSA section.  If they are included on your W-2, do not enter them again.

If this is not the case, make sure you indicated 'Family Plan' for your HDHP coverage. 

From Opus 17

First, if you and your spouse were enrolled in HSA-eligible insurance for the entire year, your limit would be $7000 (unless over age 55 which would raise your limit.)

If you are being told you have excess, the most likely reason is you did not finish the interview and are jumping around from piece to piece.  Turbotax assumes your contributions are non-allowed until you finish the health insurance interview and tell the program that you had qualifying HDHP insurance and were not covered by any other insurance for the whole year.  I believe this can be accessed both from the 1099-SA interview and from the HSA interview on the deductions and credits page.  Make sure you complete these sections.

Why am I showing an excess HSA contribution in 2019?

[fredandsonja]

I am seeing this too - I have answered all of the HSA questions correctly (full year HDHP family plan, no medicare, amount is less than 7000, and I only used the W2 amounts - I didn't enter any personal contributions).  It is still saying that my full amount (5800) is excess - but it is clearly below 7000.  Is there a bug in the software?

Fred

[BillM223]

Did you have an excess contribution in 2018 that you carried over to 2019? That is, did you have an excess contribution 2018 that you did not withdraw last year before April 15th, 2019?

This carries over to 2019 and reduces your HSA contribution limit for 2019.

Since this is a carryover, it's not visible to you in the HSA interview, and you don;t realize it is happening.

Note that in the HSA interview, you are asked if you "overfunded" your HSA in 2018, but what it really means is "Did you carryover excess contributions to 2019?" This is not referring to the situation where you have an excess in the previous year but withdrew it in a timely manner.

So did you have form 5329 in your 2018 return, and were there any entries in Part VII of that form?

Another thought: did you spouse have an HSA and a separate HDHP policy? did you spouse contribute to his/her HSA under the Self-only limit? That's an easy way to have an excess contribution, because if one spouse has Family HDHP coverage, then both spouses do, and they have to share the Family limit in the aggregate for both HSAs.

[fredandsonja]

No, I did not have form 5329 in your 2018 return - I did not overfund my 2018 HSA.

Although my spouse did have a separate HDHP with HSA, our combined amounts did not exceed 7000:

Your HSA summary

Here's the info we have for your HSA. If you need to add or change anything, select Edit below.

Fred   Sonja   Deduction $0   $0   Total distributions $3,439   $3,580   Taxable distributions $0   $0   Taxable earnings on excess contributions $0   $0   Taxable employer contributions $2,339   $3,500   Tax-free employer contributions $461   $0   Excess employer contributions withdrawn $0   $0

[BillM223]

Thank you for the HSA Summary.

It appears to me that of your HSA contribution of $2,800, only $461 was allowed and the remaining $2,339 was declared excess. And all of your spouse's $3,500 contributions was declared to be excess.

Yet you say that you declared for both of you that you had Family HDHP coverage for the entire year. Something is definitely wrong, but it's not the software.

In this case, since your input appears to be correct, let's try something radical - delete all your HSA information and re-enter it, in case, there is some value lingering under the covers in the HSA interview that you can't see.

Please do the following:

1. make a copy of your W-2(s) (if you don't have the paper copies)

2. delete your W-2(s) (use the garbage can icon next to the W-2(s) on the Income screen

*** Desktop***

3. go to View (at the top), choose Forms, and select the desired form. Note the Delete Form button at the bottom of the screen.

*** Online ***

3. go to Tax Tools (on the left), and navigate to Tools->Delete a form

4. delete form(s) 1099-SA (if one), 8889-T, and 8889-S (if one)

5. go back and re-add your W-2(s), preferably adding them manually

6. go back and redo the entire HSA interview.

Sometimes this is the only way to eliminate mystery problems.

[fredandsonja]

I did as you suggested:  delete W2, 1099-SA, 8889-T, and 8889-S and then re-enter W2 and do the HSA interview.  However, after re-entering our W2s, turbotax online never went back to the HSA interview:  it went through the rest of the income and then went into the "tax breaks" section.  I guess that this is ok since I don't think any of our HSA contributions should be taxable, but it is strange that it no longer asked about them.  Can I continue on now from here, or do I still need to fix something?

[BillM223]

You had either contributions to or took distributions from your HSA, right? If so, you need to run through the HSA interview again. This is so that TurboTax will generate form 8889 which the IRS requires.

To do the HSA interview, please do a Search (upper right) for hsa and then click on the jump-to link. This will take you straight to the HSA interview.

I can't speak to the vagaries of how or why the step-by-step process works. 

[fredandsonja]

Thanks, I was able to get back into the HSA section and everything looks good now - it no longer shows any excess contributions!