Excess 2024 HSA employer contribution on Form 8889 Line 2?

[GiantSlor]

My employer made an excess contribution of $94 to my HSA in 2024 and I left it there through all of 2025. (I just this week submitted a form to have it removed.) I've now completed the federal return interview, and TurboTax is showing $94 on Line 2 of my Form 8889 (apparently from the part of the Smart Worksheet that says, "Excess HSA contributions carried over from 2024 that still in HSA." But the instruction for that line says, "Do not include employer contributions." This was an employer contribution, so why did TurboTax put it there? Or did I make a mistake somewhere? Thanks.

[MaryK4 · Accepted solution]

When an excess contribution is carried forward from a previous year, the IRS allows you to apply that amount as a current-year contribution to reduce the balance and stop the recurring 6% excise tax penalty.  Even though the original $94 was from your employer, the tax law treats the carryover amount as a "personal" contribution in the year it is applied.  By placing it on Line 2, TurboTax is attempting to apply that $94 toward your 2025 contribution limit. This allows you to "absorb" the excess if your total 2025 contributions remain below the annual legal maximum. 

Since you have already submitted the form to remove the $94 this week, that removal happened in 2026. This means the excess was still in your account as of December 31, 2025, and TurboTax is correctly reporting it as still present for your 2025 filing. 
 

[GiantSlor]

So, having $94 on Line 2 won't look like a new 2025 excess contribution? I'm already at my limit for 2025.

[DawnC]

No, it is the same 2024 excess contribution.   You will still have the excess on this 2025 return.