HSA accounts should not be taxed, correct?

Forum|Forum|1 year ago
January 28, 2025
2 replies
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I max out my HSA account to the yearly limit, but I have never exceeded the annual contribution limits (not in 2023 or 2024).

I do keep a positive balance year to year; I do not spend all my HSA money.

TurboTax is trying to tax 6% to "the excess". But I do not contribute more than the annual limit.

Is this correct?

BillM223

The 6% is an excise tax on excess HSA contributions that carry over from year to year, not amounts that are in your HSA.

Are you talking about your 2024 return? In the HSA interview, if you contributed more than your annual HSA contribution limit, then TurboTax tells you that you have made excess contributions. TurboTax encourages you to withdraw the excess if you can before April 15th. If not, any excess that you cannot withdraw gets carried over to the next year and is hit with a 6% excise tax.

So, did you have excess contributions to your HSA in 2023 or 2024? We need to know more details on what you entered in the HSA interview in order to be able to help you.

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AmeliesUncle

Have you gone through all of the questions? Until you tell the program that you had a qualifying High Deductible Health Plan and did not have other insurance, it will treat your HSA contributions as non-qualifying.