HSA Excess Contribution Withdrawal

[Sk98]

Hi Everyone,

I need suggestions on HSA excess contribution withdrawal and next steps. 

I over contributed my 2024 HSA by $4150, which I apparently figured out a couple of weeks back. I reached out to my custodian and submitted Excess Contribution Disbursement form and the excess contribution + its earnings were sent back as Check. 

1. Should I reach out to my employer asking for W2c?

2. Since only few days left for tax deadline, I am currently planning to file my returns with W2. Will that create any problem now or in future ?

3. With my current W2 and excess HSA contribution, I see 5329 is mandatory with $249 (6% penalty). Now my HSA custodian removed this excess contribution, is there anyway to include/indicate this in my current 2024 tax returns?

4. My HSA custodian mentioned 1099-SA form will be mailed Feb' 2026. What and how should this be used for my next year tax returns?

Your valuable response to these are much appreciated. 

[BillM223]

1. No - your employer didn't make a mistake - the W-2 was correct.

2. Since you are not going to ask for a corrected W-2, using the W-2 that you already have is fine.

3. If you are withdrawing the entire excess, then there is no 5329 or 6% penalty. This penalty is only for excess amounts that are carried over to the next year. Is there any reason that you can't withdraw the entire amount of the excess? If you tell TurboTax that you withdraw the entire excess, there will be no more problem as noted in the first sentence,

4. It is normal that the 1099-SA for the return of excess contribution is done for the next year's return. This is because the earnings span both the 2024 tax year and the 2025 tax year...so entering it on your 2025 tax return in early 2026 is correct.