HSA and Social Security

Forum|Forum|3 years ago
April 5, 2023
7 replies
60 views

I applied for Social Security and was able to go back six months to September. I have a HSA and contributed during this time. When calculating how much I could contribute for the first 8 months of 2022. I had exceed the max. contribution by a small amount Turbo Tax stated that I could take out the small anount of the HSA so I want to be proactive but after I take out the small amount what do I do with that amount since I believe taxes need to be paid on it. Also I will need to take out the 2023 contributions, Correct? and what do I do with that amount. I have stopped contributing to my HSA within a week of applying for Social Security.

Ask the Experts - Refund - April 2023

DaveF1006

Level 15

if you withdraw the 2022 excess contribution by April 18, you will not be accessed a penalty on your return. Also, you will need to withdraw the 2023 contributions as well by the tax due date of your 2023 return, which is April 15, 2024.

To report, go to federal>deductions and credits>medical>1099SA, HSA ....
Now as you scroll through the questions, there will be a screen informing you that you have an excess HSA contribution. Here you can indicate you will withdraw the contribution by April 18. You won't be taxed now on this excess contribution.
Meanwhile, ask for a return for your 2023 contribution. If you receive the return of the contribution, you will not need to report this on your 2024 return

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Vette1996Author

Level 2

Thank you for the detailed and prompt response. Two questions :

1. The excess that I withdraw, do I need to declare as income on my 2022 tax return?

2. When I withdraw the 2023 contributions do I need to declare this as income on my 2023 tzx return?

PattiF

Level 15

No, the excess that you withdraw in 2022 is not taxable income. And the 2023 withdrawal will not be taxable income. These are your funds that you have and are not income.

@Vette1996

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