5498-SA box 2 has HSA contributions applied to 2019 AND also 2018. TurboTax therefore think I overfunded in 2019! Help!

[seberino]

Box 2 of 5498-SA has ALL contributions made in 2019 including ones applied to 2018.

Because it has this huge number that includes TWO YEARS of HSA contributions,  TurboTax thinks I overfunded when I add that number for my 2019 HSA contributions!?  (TurboTax wants 5498-SA box 2)

Can I subtract that part that meant to be applied to 2018 and enter the smaller amount to avoid TurboTax saying I'm overfunded?

Chris

[BillM223]

Yes, but read this first...

"TurboTax wants 5498-SA box 2"

At no point does TurboTax ask for anything off the 5498-SA. (if you see where it does, please tell me)

As you can see, box 2 on the 5498-SA does include all contributions made in 2019, even ones not intended for 2019. This is why we don't ask for the box 2 amount.

Instead, we ask for any "personal" contributions in 2019, that is, any contributions in 2019 for 2019 made directly to the HSA not through your employer.

You enter this on the "Let's enter [name]'s HSA contributions" screen. Note that the first line is the amount of contributions from your employer and from you by means of payroll deduction, as shown with a code of W in box 12 on your W-2.

The second line is for your "personal" (i.e., direct to the HSA not through your employer) contributions. Do not enter any part of what is in line 1 into line 2.

All clear?

[seberino]

I'm so thankful for your quick reply.  I'm not an expert at this for sure.

Please let me correct something I said wrong......It isn't 5498-SA info that

TurboTax asks for, but rather, total distributions off of the 1099-SA in box 1.

My 1099-SA box 1 includes distributions from ALL the funds I deposited in 2019 including $3090

that was applied to 2018's HSA.  Therefore, 1099-SA box 1 shows $10,568 which is MORE than $7000.

I think that is why TurboTax flags me as OVERFUNDING my HSA in 2019 when I just applied

$3090 to 2018's HSA.

How/where specify that $3090 was applied to 2018 even though deposited and spent in 2019?

Thanks,

Chris

[seberino]

One more thing....I'm guessing you'll tell me that I should enter this extra $3090 as a "personal" contribution

not through my employer?  If I do that, TurboTax still won't know it was applied to 2018 so I'll still

get flagged as overfunding in 2019 no?

[BillM223 · Accepted solution]

"My 1099-SA box 1 includes distributions from ALL the funds I deposited in 2019 including $3090 that was applied to 2018's HSA. "

Actually, even though it seems like it does, it doesn't. The 1099-SA reports on distributions, as you noted, not contributions, which is what causes the excess contribution error message. It appears that your distributions just happened to match your contributions for the last 2 years. But the 1099-SA has nothing at all to do with excess contributions.

Note that the HSA is persistent, that is, amounts unspent in one year carry over to the next year. That is why it is perfectly possible to spend more on medical expenses in one year than your contributed in that year.

Was the $3090 that was applied to your 2018 return a "personal" contribution (i.e., direct to the HSA not through the employer)? If so, you DON'T report it on your 2019 return; you should have reported it on your 2018 return.

So just take it off; it doesn't belong on your 2019, and that will fix the excess contribution issue.