Question

Excess HSA

Forum|Forum|3 years ago
March 7, 2023
1 reply
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In 2021, I had contributed more to my HSA then I was allowed - pre-tax.
My HSA administrator refunded and deposited excess amount directly to my bank account linked to HSA in February 2022.

I received two 1099-SA forms for 2022 Tax Year. The first 1099-SA form had a distribution code of 1 (Normal Distribution) and the second 1099-SA had a distribution code of 2 (Excess contributions).

I entered both 1099-SA info into TT.
I, however, can't figure out if the refunded amount was factored into my earnings by the program or I have to enter this amount myself in some "miscellaneous income" section and, if so, where exactly?

M

MAK70

No, if the HSA contributions were pre-tax (or through a 125 cafeteria plan), you would have to add the income back not only for income tax purposes, but also for the Social Security and Medicare taxes. TurboTax does add the income for income tax purposes as miscellaneous income.

You will have to contact your employer to make the correction. Because you removed your excess contribution after December 31 but before the due date of your personal income tax return (April 15 most years), your employer should issue a corrected Form W-2 with additional Social Security and Medicare taxes taken out.