Deducting an excess HSA contribution in a later year

[falalala]

Hi,

We have an excess contribution of about $200 in 2022. These were employer contributions, even though I am ineligible to contribute to HSA due to multiple coverages in the family. I tried in vain to get the employer to stop the contributions.

I'd like to defer this excess contribution to 2023. IRS pub 969 shows:

You may be able to deduct excess contributions for previous years that are still in your HSA. The excess contribution you can deduct for the current year is the lesser of the following two amounts.

• Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year.

• The total excess contributions in your HSA at the beginning of the year.

Does this mean I don't have to pay 6% in 2022 and then I can deduct the $200 from 2023 contributions? Or does it mean I still need to pay 6% in 2022?

Thank you.

[AnnetteB6 · Accepted solution]

If you leave the $200 excess contribution in the account with the idea of applying it to your 2023 contribution amount, then you will need to pay the 6% excise tax as part of your 2022 tax return.  

[falalala]

Thank you!

[Mike9241]

not only do you have to pay the 6% tax in 2022 but if the excess remains in future years you'll pay the 6% tax in each of those years

[Mike9241]

the #200 becomes income for 2022. you get a deduction in 2023 if you qualify. you pay the 6% penalty every year the excess remains