1099 SA Excess Contribution

ktramo17 · ‎February 17, 2026

Hello

In 2022, my wife overfunded her HSA by $703 and in 2022, 2023 and 2024, we paid 6% excise tax on the $703. In tax year 2025, we distributed the $703 out of the HSA and received a 1099-SA which included the $703 in box 1 and box 3 has code 2 for excess contribution.

The questionnaire wizard for the form does not make sense. How do i enter this information for 2025 so that i do not pay excise tax on the $703? Also, is this distribution considered taxable income? If so, how do I enter the information so that it is taxable income but no excise tax being triggered? Note, that my wife is no longer covered under a high deductible health insurance plan as of 2023, 2024 and 2025. She is not employed. She still has an HSA.

ktramo17

I was in the phone with Turbotax for over 2 hours and no one had any idea on how to help me resolve this issue nor knew the answer. Please help! Also I think the software needs a complete overhaul in terms of the form as related to this section.