Turbotax is incorrectly determining that i have excess hsa contributions. I input this detail in the W-2 section and the 1099-SA form and it's duplicating

[BillM223]

The 1099-SA form only reports distributions (payments for medical expenses); it has nothing to do with contributions, excess or otherwise.

It is possible to accidentally indicate to TurboTax that you made excess HSA contributions when perhaps you didn't. Please see the situations below to see if any of them apply to you (pay special attention to #2).

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.

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. Don't enter the code W amount anywhere on the return other than on the W-2 page. Don't enter it on line 2 of the "Let's enter [name]'s HSA contributions" screen.

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 2019?".

Fourth, if you had a carryover of excess contributions from 2018, then this carryover is applied to 2019 as a personal contribution, which could cause an excess condition in 2019 as well. But note: if you had an excess contribution in 2018 but cured it by withdrawing the excess in early 2018, then do NOT report an "overfunding" on your 2018 return.

Fifth, the Family limit ($7,000) is for the aggregate of contributions by both taxpayers, even if both taxpayers have their own HSAs. That is, one taxpayer can’t contribute $7,000 to his/her HSA and the other contribute $3,500 to the other HSA – the $7,000  limit applies to the aggregate of all HSA contributions credited to the family (in this case, the excess contributions would be $3,500).

[RogerT]

On the W2 input form, when I follow instructions "if W in box 12 enter HSA contribution for Spouse or Taxpayer"   a 7200 number here adds to my income. (Spouse is the one who contributed to HSA). I am using Premere download product.  If I input zero for spouse then the total income number looks correct without adding 7200 to income... but this creates a Form error.

[RaifH]

Is the W-2 for yourself or your spouse? I assume it is for your spouse since you say they are the one who contributes to an HSA. I also assume the HSA is a family plan due to the contribution amount. Let's validate your entries:

1. After entering your spouse's W-2 with the Code W in Box 12, it should have asked Did any of your HSA contributions go into your (the taxpayer's) account? Answer No.
2. This should have opened an area on your tax return for HSAs. If you do not see it, go to Federal > Wages & Income > Less Common Income > 1099-SA, HSA, MSA and click Start/Revisit.
3. Make sure your spouse has HSA selected.
4. If you made any withdrawals from your HSA, you should receive a 1099-SA and answer Yes to Did you use your HSA to pay for anything in 2021? Otherwise, select No.
5. Assuming your spouse did not inherit this HSA, select No.
6. Under Let's enter your HSA contributions your spouse's employer amount should already be in there from the W-2. Unless you made additional contributions, leave Any contributions you personally made blank. Please do not re-enter your $7,200 contribution here as that has already been accounted for by the amount on your W-2.
7. Answer the questions on the next two screens, then make sure you answer the question related to your HDHP correctly on the next screen. If your spouse had family coverage the entire year, you should not be penalized for excess contributions.

Once you enter it this way, the HSA contribution should not be added to your income. If any of my assumptions are wrong or if this does not work, please let us know.

@RogerT