HSA Overfunding Question

[GregSimms]

Hi,

In 2023, I only had my HDHP for 11 months instead of 12 and accidentally overfunded my HSA. I corrected this with my HSA custodian and because the excess contribution was deducted from my paycheck (pre-tax), Turbotax had me pay taxes on that amount for the 2023 with no penalty because I corrected it. For the 2024 tax year I have the 1099-SA from my custodian that includes the excess contributions and earnings. After I enter the 1099-SA into Turbotax this year, it asks if I overfunded my HSA in 2023, which I answer yes, and it asks for "Amount from 2023 Form 5329, Line 48" but because I had no penalty there was no Form 5329 in my 2023 tax filing. Am I supposed to enter zero here or am I supposed to answer no to "Did you overfund your HSA in 2023?"

Thanks!

[BillM223 · Accepted solution]

No, the question "if I overfunded my HSA in 2023", it actually means, "did you carry over any excess from 2023?".

In your case, you would answer NO, since you cured the excess in a timely manner in early 2024.

[GregSimms]

Thank you! That is very helpful