IRs rejected taxes for Form 8889, 'TotalHSADeductionAmt' must be equal to the smaller of 'HSAContributionAmt' or 'HSALimitedContributionAmt

[BillM223]

It appears that this message is referring to line 1 is not the smaller of line 2 and line 12 on the 8889. 

May I assume that you had an excess HSA carryover? 

We are looking into this issue.

[tcbaxfam]

Hello,

Yes we had excess HSA carryover for 2023 and also for previous years. We are not taking out a distribution and will pay the taxes and penalty. We also have had excess contributions in at least the previous 2 years and also did not take a distribution. Turbo Tax said to wait until February 9 to refile, but I don't want to do this until the issue is resolved if it is something in the Turbo Tax program so please advise.

Also, I don't understand your comment on line 1 is not the smaller of line 2 and line 12 on the 8889 since line 1 is a check box for individual and family coverage.

I had also retired at the end of October and went to coverage under my wife's plan for the last two months.

Thanks for your assistance with this matter!

[dmertz]

Today's update to TurboTax has corrected the problem by including the applied excess on line 2 of Form 8889.

[BillM223]

There was an update today that affected the 8889, so please try to e-file again and let us know what happens.

[tcbaxfam]

Update has fixed the issue and the IRS has accepted the return. Thanks!

[dmertz]

Be careful.  On Form 5329 TurboTax is now calculating Form 8889 line 43 incorrectly which potentially results in an incorrect (too low) amount on line 45 being subtracted off of your excess.  If the amount of new money contributed for 2023 plus twice the amount of excess being applied exceeds your contribution limit, TurboTax presently erroneously calculates a penalty on Form 5329.