After HSA excess contribution withdrawn, what is the contribution amount to report?

[Aerodyne]

My max allowed contribution for 2022 was $7300.

I contributed $608 (7300/12) through my employer for January, and then left the employer.

For the next 9 months I continued the HSA via COBRA and self funded the HSA account with post tax dollar contributions.

Total HSA coverage for the year: 10 months, therefore total contribution allowed: $6080 (7300/12*10).

At the end of the 9 months of self funding, I realized I made excess contribution of $220, therefore, I worked directly with the HSA company to reverse it.

Before the correction, the total contributed was: $608 (via employer) + $5692 (self funded) = $6300

After withdrawing the excess $220, the total stood on the allowed $6080.

I received 2 x 1099-SA forms which I entered into TT: one with normal distribution and one with $220 as excess contribution (distribution code 2). The contribution via the employer was on the W2.

The question is:

Turbotax's "Let's enter HSA contributions" screen shows:

- 2022 employer and payroll contributions: $608

- Any contributions you personally made (not through your employer): ?

What is the number I need to enter for the contribution I personally made? I think of 2 options:

1. The contribution I made BEFORE the correction, i.e. $5692

2. The contribution I made, AFTER the subtracting the correction (which is money I got back), i.e. $5692 - $220 = $5492

Thank you.

[SharonD007 · Accepted solution]

You would enter your contribution minus the excess that you withdrew.  If you enter the total before your withdrawal, TurboTax will alert you with the message You may want to withdraw funds from your HSA. 

Please see the TurboTax Help article Where do I enter my HSA contribution? and What Is the IRS Form 8889?

[Aerodyne]

Thank you for your response.

Allow me to verify I understand your answer correctly:

• Although TT (and the IRS) know about the $220 excess contribution withdrawal via the reported form 1099-SA (with distribution code 2) , they will *not* subtract that amount from the contribution amount I report I made.
• TT (and the IRS) will know that the contribution amount I report I made *already includes* the subtraction of the excess contribution that is reported on form 1099-SA (with distribution code 2).

Thank you for confirming and helping me and other potential TT users.

[DianeW777]

Absolutely. TurboTax will not subtract the excess contribution withdrawal from your contribution.  The Form 1099-SA takes care of handling the withdrawal independently.  TurboTax (and IRS) do understand that your contribution will be taken at face value as though the excess contribution withdrawal is a separate and identifiable non-issue since it was withdrawn on time appropriately.