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Level 2
November 8, 2020
Question

2019 Excess Contribution

  • November 8, 2020
  • 1 reply
  • 9 views

I am in the process of resolving an errant HSA excess contribution on my 2019 Tax return already submitted.  Current filing shows a $13,200 excess contribution with a $4800 Tax free employer contribution along with a $4200 deduction (not sure why this is the case).   When I amend the excess contribution by removing the $13,200, the deduction is eliminated causing income to increase by $4200 resulting in an increase to my tax burden.  this does not make sense since the excess contributions are taxed at 6%, my expectation is that the tax burden would go down.  Furthermore, can you explain why there is a $4200 deduction for the situation I described above since this is the cause of increased income?

    1 reply

    Level 4
    November 8, 2020

    Is the $4800 on your W2, box 12 with a code "W", and did you or someone else make a $4200 contribution to your HSA in 2019. Do you know the total amount contributed to your HSA in 2019. do you have a family plan, or single HDHP. need more info to help you. BTW there is not a charge for extra words in your question. 😁

    Critter-3
    Level 15
    November 8, 2020

    Make sure you are entering the HSA info properly ... and it sounds like you may have put in too much as the max HSA contributions for 2019 are : 

     

    HSA holders can choose to save up to $3,500 for an individual and $7,000 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,500 for an individual and $8,000 for a family) – and these contributions are 100% tax deductible from gross income.

     

     

    The HSA is handled in 3 parts in the TT program :

    First the contribution:

    https://ttlc.intuit.com/replies/4557768

    https://ttlc.intuit.com/replies/4785646

                                      

    Next the limitations screen to confirm you are eligible to make the contributions:

    Until you complete the HSA portion of the TurboTax interview to establish your eligibility for an HSA contribution, TurboTax will treat the amount entered on the W-2 form as an excess HSA contribution.

    https://ttlc.intuit.com/replies/4788059

     

    And lastly any distribution:

    https://ttlc.intuit.com/replies/4787864