HSA over contribution

[Robert72455]

I have the "excess contribution" on the HSA worksheet. Not that I would't love the extra money, how do I edit the amount entered to $0.00?

[VictoriaD75]

 In 2019, the contribution limits are $3,500 and $7,000 respectively for self-only and family plans.

The most common error I see when entering HSA contributions are double reporting. Typically, these payroll contributions are reported on your W-2 in box 12 with code W. If that is the case, no other contribution needs to be reported in the software.

Under the Deductions & Credits menu, confirm the following:

• Expand the menu for Medical
• Click Start/Revisit next to HSA, MSA Contributions
• Confirm the account ownership and click Continue
• Continue in through the screens until you reach Let's enter your HSA contributions
• Stop here. If all of your contributions were through payroll deductions and reported on your W2, do not enter anything on this screen. If that is the case, either leave the box empty or type $0 in the box next to Any contributions you personally made

If it turns out you did have an excess contribution, the following applies. Generally, you must pay a 6% excise tax on excess contributions. See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. The excise tax applies to each tax year the excess contribution remains in the account.

You may withdraw some or all of the excess contributions and avoid paying the excise tax on the amount withdrawn if you meet the following conditions.

• You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made.
• You withdraw any income earned on the withdrawn contributions and include the earnings in "Other income" on your tax return for the year you withdraw the contributions and earnings.

Pub 969 Tax-Favored Health Plans

[orangelena]

Hi,

How do I withdraw HSA excess contribution?

thank you

[DawnC]

If you overfunded or weren't eligible to contribute to your HSA in 2020, you'll need to withdraw the overage by April 15, 2021, to avoid a penalty (October 15 if you filed an extension).    @orangelena

The best way to handle an excess contribution is to withdraw it from your account and include it as taxable income for that year.  Also, you must withdraw any income earned on the excess contribution from your HSA and include the earnings in “Other income” on that year’s tax return.

Contact the HSA trustee - the financial institution that holds your Health Savings Account.   Your employer will have their information if you don't.   Tell them that you need to withdraw the excess contributions and earnings.  You can then indicate in TurboTax that you have removed the excess contribution and avoid the penalty.