HSA

[wmackayjr]

I am 67, married and still working full time and covered under a HDHP.  I have been contributing the max allowable into my HSA every year.  In March 2022 I started taking Social Security.  In January 2023 I found out that I was not allowed to contribute to HSA if taking SS.  I contacted my HSA and filed an excess contribution form to remove the $8,300 I contributed in 2022.  I did not receive a corrected 1099-SA or 5498-SA because the distribution happened in 2023.  At this point, do I  need to report anything more to the IRS?  

[Mike9241]

it's not Social Security per se it's being covered by Medicare which is a non-HDHP disqualifying you from contributing to an HSA.

[SharonD007 · Accepted solution]

I’m assuming that you mean that you were ineligible because you became eligible to receive Medicare. Since you overfunded your HAS in 2022, you need to withdraw the excess amount plus the earnings by April 17, 2023 (October 15, 2023, if you file an extension) to avoid the penalty (which you did). Your contribution limits for the year are prorated based on how many months of the year that you were eligible.

You do not need to report anything additional to the IRS but please ensure that you answered the questions correctly in TurboTax. Follow the instructions below to check:

1. Launch TurboTax and select Search at the top by the magnifying glass
2. Search for hsa and select the Jump to hsa
3. Review your answers to the interview questions until you get to the Let's enter your HSA contributions screen
4. Make sure that you answer No to the question Did you overfund your HSA in 2022? since you withdrew the excess amount plus the earnings by the due date of your tax return.

For additional information on HSAs, please refer to the TurboTax article What Is the IRS Form 8889? which is the form that you include with your tax return when you are the beneficiary of a health savings account.