Incorrect "excess withdrawal" from HSA on W2, W2C won't arrive in time of deadline, should I still withdraw excess from my HSA based off the incorrect W2?

[mchi19]

Hi there,

I received my W2 from my current employer for 2023 and under the Income and Tax Withheld (box 12) labeled W with the amount being $4156.68. This amount is incorrect as it covers 11/1/2022 - 10/31/2023 and I received a 5498-SA form where I contributed the max amount of $3850 to my HSA account in 2023.

My current W2 is incorrect and I've requested my company's payroll to correct it but I will not receive the W2C until after the April 15, 2024 tax deadline. 

I have a few questions:

1) Should I still submit my taxes with the incorrect W2? and file an extension and submit the W2C when I get it?

2) For now, if I do submit with the incorrect W2, should I still withdraw my the excess amount ($4156.68 - 3850 = $306.68) before the 4/15 deadline? Won't it be taxed too?

I don't have the correct W2, so how will I know how much the estimated tax is?

[BillM223]

Do you have any sort of feel for if you will owe tax when you really file? For many people who are employees doing withholding, you are likely to get a refund. You can get a feel for this by running your tax return (but not filing!) with the code W amount one way or the other, just to see if you get a refund each time.

If so, then I would go ahead and file an extension. You won't owe anything in any case, so your position is OK. Then when you get your corrected W-2, you can file, knowing that you are doing it right the first time.

If you think you might owe some money when you finally file, then pay enough when filing the extension to make what you owe positive, then do the same thing: file when you have all the right forms.