HSA Excess contribution withdrawal after tax due date

[vg101]

Due to retroactive Medicare assignment, I was notified on 4/16/26 that my coverage will start on 9/25. By that time, I had already submitted my 2025 Tax Return with HSA contributions for full 2025 year in amount of $9500. So, based on IRS 8889 form instructions   I recalculated my maximum contribution for 2025  to be $6367 and requested my HSA custodian for ROE in amount $3183. Amount they actually refunded was 3109.84 due to negative earnings (losses) in amount $-73.16.

I understand that I have to submit amendment to my 2025 Tax return and I would like to use 6 months extension rule to prevent excess penalty taxes. When I used Turbotax  it calculated correct HSA excess amount ($3183) but :

• in HSA questionary I do not see where I can enter actual value ($3109.84) I got refunded to get it listed in 8889-line 14d as requested by IRS.

Form 8889 Line 14b Instructions

Include on line 14b any distributions your HSA made in 2025 that qualified as a rollover contribution to another HSA. See Rollovers, earlier. Also include any excess contributions (and the earnings on those excess contributions) included on line 14a that were withdrawn by the due date, including extensions, of your return.

• I also do not see how can I add “Filed pursuant to section 301.9100-2”  to the top of 1040-X form to request 6 months extension

Form 8889 Line 13 Instructions

Note. If you timely filed your return without withdrawing the excess contributions, you can still make the withdrawal no later than 6 months after the due date of your tax return, excluding extensions. If you do, file an amended return with “Filed pursuant to section 301.9100-2” written at the top.

[Mike9241]

• you will have to create a dummy 1099-SA indicate the gross distribution (box 1) as $3183 you can enter loss in box 2 but it will not carry into your return. distribution code is 2. this should carry box 1 into line 14 of thr 8889
• you may have to create a dummy ssn for payer's TIN on th 1099-SA
• I also do not see how can I add “Filed pursuant to Section 301.9100-2”  to the top of 1040-X form to request 6 months extension. TurboTax is lame in this regard becuae it doesn't provide for this. so you will have to print out your amended return and write it at the top of the 1040-X. Mail your return using a tracking service.   
• . 

[vg101]

Hi Mike,

Thanks a lot for your response and details of work around

What I do not understand why TurboTax is not supporting what is required by IRS ( like line 14b in form 8889). If it is a bug - we need to open a ticket and they should fix it due to if they violate IRS requirement they cannot claim that this product is compliant to IRS rules.

I just do not feel comfortable that to comply with IRS requirements I have to generate a fake documents. If I have to print out 1040-X to put “Filed pursuant to Section 301.9100-2” ( again required by IRS) - I most likely can update form 8889 line 14b manually too

Do you know how to open a ticket with Turbotax ?

[CatinaT1]

It isn't necessarily a bug in the sense of broken code, but more of a workflow limitation. TurboTax is designed to build Form 8889 based on a 1099-SA, which you won't officially receive until January 2027. Without that form, the software doesn't "see" the withdrawal.

Here is the cleanest way to satisfy the IRS requirements:

1. Switch to Forms Mode.
2. Find Form 8889 in the list on the left.
3. Scroll to Line 14b.
4. Even though you received $3,109.84, you should enter $3,183 here. Line 14b is meant to "cancel out" the excess contribution you reported on Line 14a. By entering the full principal amount, you are telling the IRS you removed that entire contribution (and its associated earnings/losses) from the account.
5. If the field is yellow/calculated, Right-click and select Override.

TurboTax does not have a header field for Form 1040-X, so you will want to print and mail it. Once you print your Form 1040-X, write “Filed pursuant to section 301.9100-2” at the very top of the first page.

[dmertz]

No dummy Form 1099-SA is to be entered.

The distribution of the loss-adjusted amount of $3,109.84 accomplished the return of the entire $3,183 excess contribution.  Simply indicate to TurboTax that $3,183 of contribution was returned.

In your explanation statement for the Form 1040-X, simply explain that the return of $3,183 of excess contribution was accomplished by a distribution of a loss-adjusted amount of $3,109.84.

You will receive a code-2 2026 Form 1099-SA early next year.  You will enter this Form 1099-SA into 2026 TurboTax, but it will have no effect on your 2026 income because there will be no taxable gains shown in box 2.

[vg101]

Hello CatinaT1,

Thanks  a lot for your response.

It actually works - I was able to modify form 8889 with Excess contribution amount returned.

One issue - Turbotax is not liking it and compalined that overrided forms cannot be cross-checked and do not allow electronic filing. But for me it should be OK due to I have to print “Filed pursuant to section 301.9100-2”  to the top of 1040-X form anyway.