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HSA excess contribution doesn't look right on return

I had excess HSA contributions for 2025 that were returned to me with earnings in March 2026, due to Medicare enrollment backdating effective to August 1, 2025. In TT, I marked my insurance plan as Medicare/None for August through December 2025. From prior posts, I understood that only the net HSA contributions would show on form 8889. But the full employer contribution of $9550 is showing on line 9 and line 8 is showing $5571 which is equal to 7/12th of contributions that are eligible. The difference of $3979 of excess contributions are showing on line 8f on schedule 1. Is that the correct way it should be reported?? Also other posts say just put the earnings in as interest income which is now showing on Schedule B line 1. (although i did not see an option to check that I didn't get a 1099 ). Yet, other posts seem to imply that earnings on excess contribution should be on Schedule 1. Which is correct reporting for earnings on the excess and if the latter, which line should it appear? Thank you. 

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HSA excess contribution doesn't look right on return

Line 9 of Form 8889 will always show the gross amount reported on your W-2.

You must answer the question about withdrawing the excess by 4/15/2026wn in 2026 as withdrawn in 2025. The earnings are taxable in 2025. The excess withdrawn, which will be automatically populated by answering "yes" to the question, will appear on line 12B. The excess is taxable because your wages (box 1 of W-2) were reduced by the excess you contributed or if the employer contributed,  a prorata portion is considsdered taxable

 

You didn't get a "2025" 1099-SA because the excess was withdrawn in 2026, so you'll get a 2026 form in 2027

so report earnings as interest 

 

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