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Donsk456
April 10, 2024
Solved

How to enter HSA Excess contribution with it's earnings in Turbotax

  • April 10, 2024
  • 1 reply
  • 0 views

Hello,

 

    I had excess contribution towards HSA in 2023 and received form 1099-SA.

   Here is what i would like to do:

  1. The gross distribution is 1885.64 (line 1) , with 143.64 (line 2) of earnings.
  2.  I would like to use earnings 143.64 towards medical bill
  3. If I input 1099-SA as is, Turbotax cosiders 1742 as excess contribution, returned last year. And 143.64 as misc earnings, to be taxed.
  4. Is there a way to have 143.64 considered towards medical bill from last year and use form 8889. I see the issue with 1099-SA with reason code being 2 (excess contribution)

@BillM223 

    Best answer by KrisD15

    No.

    The issue is not what the distribution was used for, the issue is you put too much into the HSA. 

    Follow the suggestion made by the software.

    It sounds like this distribution was made JUST TO CORRECT THE EXCESS CONTRIBUTION?

    If yes, enter the 1099-SA and report that NONE was used for medical expenses, this nulls the excess. 

    Claim the earnings, this addresses the earnings on the excess. 

     

    If you paid medical expenses, I assume you could have used your HSA for those expenses as well, but if not, claim the medical expenses as itemized deductions. 

    You can't use the distribution to remove excess contributions for medical costs. 

     

     

    1 reply

    KrisD15
    KrisD15Answer
    April 10, 2024

    No.

    The issue is not what the distribution was used for, the issue is you put too much into the HSA. 

    Follow the suggestion made by the software.

    It sounds like this distribution was made JUST TO CORRECT THE EXCESS CONTRIBUTION?

    If yes, enter the 1099-SA and report that NONE was used for medical expenses, this nulls the excess. 

    Claim the earnings, this addresses the earnings on the excess. 

     

    If you paid medical expenses, I assume you could have used your HSA for those expenses as well, but if not, claim the medical expenses as itemized deductions. 

    You can't use the distribution to remove excess contributions for medical costs. 

     

     

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