How can I Amend my tax return for an excess HSA contribution for 2016 which was Withdrawn in 2017, AFTER I filed my 2016 return?

How was the excess contribution made?
Did you have the excess contribution returned to you along with any earnings attributable to the excess contribution?
Did your 2016 tax return report the excess contribution and 6% excess contribution penalty?
Was your original 2016 tax return or a request for filing extension filed by the April 18, 2017 deadline?

Excess HSA contribution was returned in 2017 after filing the 2016 tax return by the April, 2017 deadline.
No excess or the income earned on the excess was reported when the 2016 taxes returns were filed.
Thank you.

Do I need to complete a 1040X and a corrected 8889?

If your 2016 Form 8889 and reported an HSA contribution and your 2016 Form 5329 reported the excess contribution and calculated a 6% excess accumulation penalty, you need to amend your 2016 tax return to remove the reporting of the HSA contribution that was distributed to you as a returned excess contribution.  When you file this amendment, you must include the following notation on the Form 1040X :  "Filed pursuant to section 301-9100-2."

The earnings (if any) required to be distributed with the returned excess contribution are reportable on your 2017 tax return.  TurboTax will handle this when you enter the code 2 Form 1099-SA that you'll receive for this distribution.

No excess or the income earned on the excess was reported when the 2016 tax return was filed. The 2016 8889 did not reflect an excess  because the excess was not discovered or returned  until May of 2017, after timely filing the 2016 1040. Also, the income of 2 cents was returned.    Also, no 5329 was filed because there was no indication of an excess. Aa background, an additional contribution through payroll was made to the HSA account for 2016 in April 2017, which created the excess.  So the W-2 does not reflect the excess because the W-2 was issued in Jan 2017.  Do I need to amend the 1040? And now file a corrected 8889?  It appears I  have until Oct 15, 2017 to report the excess to avoid the penalty per the IRS instructions.  And, the income of 2 cents will be reported next year on the 2017 return.

This is an unusual situation.

You'll need to amend 2016 tax return to show on line 9 the entire amount contributed for 2016, including the amount contributed for 2016 in 2017.  If the only contributions were the ones made through your employer, this should be the total of the amounts shown in boxes 2 and 3 of your 2016 Form 5498-SA.  You'll do this by having entered the code W amount from box 12 of your W-2, then indicating that your employer told you about other contributions and entering the amount that your employer deposited through payroll deductions in 2017 as a contribution for 2016.  Finally, indicate that you had the excess returned.  In your explanation for the amendment, indicate that you adjusted the amount shown on Form 8889 line 9 to show the amount contributed for 2016 through your employer in 2017, indicate the amount of excess that you had returned, and indicate the amount of earnings ($0.02) that were distributed with the returned contribution.  2 cents of earnings rounds to $0, so there are no taxable earnings.  Your amendment will also show the amount of your returned contribution as other income on Form 1040 line 21 and will result in a corresponding change to your AGI on Form 1040X line 1 which will propagate to the lines that follow.  This ends up being a bit strange since it has the effect of moving 2017 income into 2016, but as far as I can tell, it's as required.

If you’ve already filed your tax return and then discovered information that needs to be updated or changed, your next step is to wait to see if the IRS accepts the original tax return before you do anything else.

·         If the IRS accepts your current year tax return, submit an amended 2015 tax return to correct mistake.  Note, it is recommended that you also wait until you receive your refund, if one is due, before you file the amendment.

·         If the IRS rejects your current year tax return, you'll have the opportunity to fix the mistake using TurboTax and then e-file the corrected version.

·         To check the status of your tax return, use the "Where's my Refund" tool provided by the IRS in the following link.https://www.irs.gov/Refunds 

Important: To learn more about amending your tax return, please review the information in the following link.https://ttlc.intuit.com/questions/1908543-do-i-need-to-amend-my-tax-return

Click or tap a tax year for specific amending instructions.

·         2016

·         2015

·         2014

·         2013

Related Information:

·         What does it mean to "amend" a return?

·         Do I Need to Amend my Tax Return?

·         Will amending delay my original tax refund?

·         What is the deadline for filing an amended return?

·         Can I e-file my 1040X to amend my return?

GEN12781

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