I have a family coverage HDHP. On Form 8889-T it shows the Family coverage for each month and line 3 shows $7750. Box 12b of my W2 shows $5000 in contributions to my HSA for my employer and myself in total, which I can see on line 4 of Form 8889-T. Line 5 = line 3 - line 4, which is $2750. The form is calculating that I overfunded my HSA by this $2750, which doesn't make sense to me. If the contribution limit is $7750 and total contributions were $5000, how is it overfunded? There were no excess contributions from 2022, and no additional contributions were made outside what was recorded in my W2 (the $5000). I feel like I answered all the questions correctly. The HSA Summary is showing taxable employer contributions of $2250 and tax-free employer contributions of $2750. The amount I personally contributed (found in my 12/31 pay stub) is $1800. Can someone help me understand why the form is saying the HSA was overfunded?
"which I can see on line 4 of Form 8889-T"
On your 8889, do you actually have an amount on line 4? This is for yours and your employer's contributions to an Archer MSA, which is not an HSA.
Do you have an 8853? This is a form generated by TurboTax for your Archer MSA. If yes, do you have a code R in box 12 of your W-2?
We need to understand why you are showing that you have an Archer MSA in order to understand your situation.
One way the math would work is if you entered the $5000 as an independent contribution in the HSA interview. Workplace contributions should only be entered via the W-2. If you had $5000 workplace, and entered the $5000 again in the main interview, you would have $10,000 total which is a $2250 excess.
On form 8889, Line 2 should be blank or zero. Line 4 should be blank or zero (Archer MSAs are uncommon). The employer contribution from your W-2 should be on line 9. If you have an entry on line 2, that means you double-entered your employer contribution as if it was an independent, after-tax contribution.
Thank you for responding. I think I figured it out.....There is a title 'Report Archer MSA Contributions', and the specific action is 'Enter all contributions made for 2023 to regular MSAs or Archer MSAs owned by you or your spouse. Include any employer contributions'. I entered the $5000 because it was a contribution to a regular MSA, which is what the question asked. Once I removed that and left the 'All 2023 MSA Contributions' box blank, the process corrected and I am no longer overfunded. The Your HSA Summary now shows the $5000 as Tax-free Employer Contributions and there is no excess contributions. This line of questioning doesn't make sense though, it seems it should only be asking for contributions to Archer MSAs?
So you have an MSA and not an HSA? MSAs are still valid, but are obsolete in favor of HSAs. So we see few questions about MSAs. So which one do you have? And do you have a code W or a code R in box 12 of your W-2?