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Excess contributions to a Health Savings Account & Penalty

Forum|Forum|6 years ago
June 7, 2019
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I saw this statement while working on my return. Does it apply to me ? "The penalty comes from your $90 penalty for making excess contributions to a Health Savings Account."
My employer made $1500 contribution to my HSA. I did not contributed myself. I see that its under the limit. So penalty is not imposed on me ? Correct?
So limit I found is: (Employer + employee)
Individual: $3,350 Family: $6,750

So my employer contributed 1500 so it means I can still contribute 5250 from my pocket?

My wife is Homemaker and its just me and my wife in the "family"

TurboTax Deluxe Online

Best answer by ghost

That's correct.
Form 1040, line 21 should be blank or zero.
Form 1040, line 59 should not include $90 HSA penalty.

You're welcome.

ghost

Employee

The program has determined that your $1500 HSA contribution in ineligible. The $90 is the 6% penalty for making an ineligible contribution. The question is why is this happening. Did you go through the HSA interview that is found in the medical deduction section? That is where you must answer the HSA eligibility questions. Until you have proven your eligibility, the program assumes you are NOT eligible and taxes the contribution. Once you have successfully completed the eligibility test questions, the program will allow contribution up to the maximum allowed.

A

AgrawalAuthor

I did go over the HSA interview that is found in the medical deduction section and responded to that. Not sure if my responses are correct and if this penalty is applied on me? Can you validate or how do I get this verified by expert?

ghost

Employee

You should see the $90 penalty on Form 1040, line 59 adding to your total tax. That indicates you are penalized.
In the HSA section, the answers to the eligibility questions must be,
Affirm HDHP insurance in 2016 (family or self),
No Medicare enrollment.
Also, you cannot be a dependent (assume you are not).

ghost

Employee

That's correct.
Form 1040, line 21 should be blank or zero.
Form 1040, line 59 should not include $90 HSA penalty.

A

AgrawalAuthor

These are the question I found:

1. Tell us about the health-related accounts you had in 2016

I selected "HSA"

2. Did you use your Health Savings Account (HSA) to pay for anything in 2016?

I answered "NO"

3. Did XXXX inherit this HSA?

I answerd "NO"

4. Let's enter XXXXX HSA contributions

I answered "0", Employer selection by default to 1500

5. Did your employer tell you about any other contributions?

NO

6. Did you have Medicare at any time in 2016?

NO

7. Was XXX enrolled in a High Deductible Health Plan (HDHP) in 2016?

yes, me and my family

8. Did you overfund your HSA in 2015?

No

A

AgrawalAuthor

Thanks. I will confirm this on 1040. Thanks

ghost

Employee

You're welcome.

A

AgrawalAuthor

Yes, line 21 is Blank and 59 is blank too. This helps. Thanks a lot.