Should I report my 2018 Excess Contribution to HSA as Other Income in my 2018 taxes, since Turbo Tax doesn't catch it (result of divorce in 2018)?

[wright-kirsten-m]

I divorced in 2018 (was on a high deductible family plan when married) and my ex and I both accidentally over-contributed to our respective HSA's as a result of going separate ways and not keeping track. I withdrew the over-contribution during March 2019 and filed for an extension. I think I need to report this in my 2018 Other Income, but TurboTax doesn't pick up my excess contribution because it looks like I was within my family-high-deductible limit. How do I report this?

[dmertz]

If the excess contribution was though your employer, reported with code W in box 12 of your W-2,  and TurboTax determined that you had an excess contribution after you completed the HDHP coverage questions, TurboTax will ask if you will be removing the entire excess contribution.  Answering yes will cause TurboTax to automatically include Schedule 1 line 21 the amount of the returned excess.

If you personally contributed rather than contributing through your employer, TurboTax simply excludes the amount of the returned excess from Schedule 1 line 25.

TurboTax will only allow you to report the return of an actual excess contribution because only actual excess contributions are permitted to be returned.  Entered properly, TurboTax will catch an excess contribution, even under the circumstances of a divorce.  Are you sure you had an excess contribution; did TurboTax indicate an excess contribution when you entered the amount originally contributed (either with code W in box 12 of your W-2 or as a personal contribution)?  Did you have any type of HDHP coverage on December 1, 2018?

[wright-kirsten-m]

I unfortunately do have an excess contribution, as I agreed to let my ex take the majority of the allowable contributions between us. H&R Block Online asked this specific question (basically, "Between you two, you were allowed to contribute $X. What portion of your allowable contributions did you agree would be yours?"), but still couldn't handle reporting it properly, so I switched to TurboTax because I thought it could. 

The contribution was through my employer, but as noted, it's not an obvious over-contribution, as it only is one as a result of my divorce and me losing my high deductible plan (I was NOT on a high deductible plan as of December 1, 2018).

As I understand it, I need to report this as "Other Income" on my Schedule 1 Line 25. So should I perhaps simply add that as "Miscellaneous Income" for Turbo Tax's purposes? I don't completely understand whether I need to file an additional form, since my 1099-SA has not yet been corrected (and won't be until 2020, for tax year 2019) and I don't owe the 6% excise tax as I removed the excess.