If
in fact you were claimed as a dependent on someone else's return, then you were
not eligible to make HSA contributions (or your employer, either). Too many employers fail to ask new young employees if they are going to be claimed as a dependent on someone else's return.
If, in
fact, you were claimed as a dependent, then you need to do the following:
1.
Contact the HSA administrator and ask for the withdrawal of a "Mistaken
Contribution". Explain
about the employer making contributions when you weren't eligible. If they honor
this request, then they will send you a check for the total amount contributed.
2. If you made any payments out of the HSA, then contact your HSA administrator and report a "Mistaken Distribution".
This is the amount that you took out of the HSA to pay for medical expenses. Be nice, because they don't have to do this. They will ask you to complete a form and to send it to them
along with a check for that amount.
3. When
you enter this in TurboTax, report your original numbers (like the amount with
code W in box 12 of your W-2). Then indicate that you had "none" for
HDHP coverage all year (yes, of course you did, but you weren't eligible for
the HSA). This will cause TurboTax to declare all contributions as excess
contributions. TurboTax will then ask if you will withdraw the entire excess
before the due date of the return. Since you are already working on this
(see #1), you answer "yes", and the contributions will be added to
line 21 (Other Income) as they should be.
4. Next
year (i.e., for tax return 2018), you will probably get a 1099-SA reporting
earnings on excess contributions. You will enter that in the HSA interview and
be taxed on it (as is right).
