Incorrect 5498-SA

Forum|Forum|4 years ago
March 2, 2022
2 replies
19 views

Hello and good day, everyone!

I'll try to make this as simple as possible. There was an issue with my wife's former employer and its payroll department in 2020. They ended up making an extra $20 HSA contribution in January 2021 for 2020 (long story). The HSA trustee ended up sending a corrected 2020 5498-SA showing $20 was contributed in 2021 for tax year 2020. That was fine and the 2020 taxes were submitted successfully.

Fast forward to this year. We were shocked to see the HSA trustee sent another 5498-SA this year for Tax Year 2021 also showing a $20 contribution (for 2021). The issue is that my wife already fully funded her HSA for tax year 2021. Also, she wasn't employed in 2021 by that company, so there was no way the $20 contribution could have happened for tax year 2021, particularly when it was accounted for in 2020. We called the HSA trustee and while they acknowledge there is some error, they won't fix it (they are very difficult), so I am stuck.

What should we do?

Thank you!

Best answer by dmertz

Both Forms 5498-SA are correct due to the oddities of the way that Form 5498-SA must be prepared. Box 2 is required to show contributions made in a particular year, regardless of the year for which the contribution is made. Box 3 shows the amount of contributions made for a particular year after December 31 of the year for which the contribution is made.

In your wife's case, Box 3 of the 2020 Form 5498-SA shows that a contribution for 2020 was made in 2021 and was not included in box 2 because it was not made in 2020. Assuming that no contributions were made for 2019 in 2020, your wife's contributions for 2020 are the sum of the box 2 and box 3 amounts on the 2020 Form 5498-SA. Box 2 of your wife's 2021 Form 5498-SA properly includes the $20 contribution made in 2021 for 2020 as well as any contributions made in 2021 for 2021.

To determine from Forms 5498-SA the amount contributed for any particular year, you must subtract from the box 2 amount shown in that year's Form 5498-SA any amount in box 3 of the previous year's Form 5498-SA. In your wife's case, to determine the amount contributed for 2021 you must subtract the $20 shown in box 3 of the 2020 Form 5498-SA from the amount shown in box 2 of the 2021 Form 5498-SA. Since no contributions were made for 2021, your wife's 2021 Form 5498-SA should have $20 in box 2.

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BillM223

Level 15

So was there a $20 contribution to your wife's HSA in 2021? If not, there is no problem with your return, because you don't enter information from the 5498-SA on to your return. All there is an inconsistency between your 5498-SA and your records. And your HSA custodian's real records should support you, because I am reading your post as "the HSA custodian accidentally indicated two years in a row that there was a $20 contribution, but the second contribution wasn't real."

You are responsible to report only those contributions that you, your employer, or any other eligible person on the planet actually made to your HSA. But if you can demonstrate that the HSA custodian made a mistake reporting the second contribution, then don't report it.

Just keep good documentation of everything and stick it in your tax files, in the (probably unlikely) event that anyone ever asks.

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I

indexfundinvestorAuthor

Level 2

Thank you, @BillM223 ! You always give great advice, and I greatly appreciate your help!

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dmertzAnswer