HSA excess contribution double counted

[MR1982]

In 2021 I accidentally made an excess contribution of $2017. In 2022 my HSA contribution (employer and payroll) was $7,096 (limit was 7,300, so $204 less than the limit). TurboTax computed 6% tax on $1,813 ($2,017-$204), which makes sense. 

this year (2023) my employer contribution was 7,300 (limit is 7,750 so $450 less). I would have assumed that this would reduce my excess contribution to $1,813-$450=$1,363 and I would pay 6% on this amount. 

however TurboTax calculates that my excess is $1,813 + $1,363 = $3,176 and it shows $1,813 as the amount on line 2 of form 8889 for 2023 (contributions to HSAin 2023).

am I missing something? I feel like I’m being double taxed??

[BillM223]

This was a known issue that appears to be fixed. If you are using the desktop product, please update your software (look to the top left for Online, then click on Check for Updates). If you are using the Online product, the update should have been applied automatically.

So please try again, and come back to the Community if the issue persists.

[MR1982]

Thanks for the help. The online version which I’m using still has the issue. I re-did all the steps for the HSA just to make sure the data was fresh but I still an error in the computation of the excess contributions.

[BillM223]

Thank you. Let me look into this.

[BillM223]

Sorry, I was misinformed. This is the latest scoop is this:

A software update to resolve this problem is scheduled for release on February 23, 2024. On or after that date, you'll need to sign into TurboTax, and follow the steps below to review and retransmit your Federal 1040 tax return: 

If you're using TurboTax online: 1) Sign in to your TurboTax account. 2) Select Federal (left menu), and then Deductions and Credits. 3) Visit the following topic under Medical: HSA,MSA 4) Walk through the Health Savings Account 5) Answer questions dealing with the over contribution of your Health Savings Account in 2022 6) E-file your return (you won't be charged any additional fees). 

If you're using a CD or downloaded version of TurboTax: 1) Update TurboTax (visit our Support Site if you need help updating). 2) Select the Federal tab, then select Deduction and Credits 3) Visit the following topic: 1099-SA, HSA, MSA 4) Walk through the Health Savings Account 5) Answer questions dealing with the over contribution of your Health Savings Account in 2022. 6) E-file your return (you won't be charged any additional fees).

[ThondiBrahmin]

Thanks for so quickly looking into this and providing updates!