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HSA transaction refunded

Forum|Forum|3 years ago
April 1, 2023
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There was an unauthorised HSA transaction made in Dec 2022. After dispute, the merchant refunded the transaction in March 2023. May I know how would my distribution/contributions in 2022 and 2023 be impacted?

I will still enter the distribution as what I received in my 2022 1099SA? but what about 2023?

Best answer by dmertz

There is no time limit. If they accept a return of mistaken contribution, they are supposed to correct whatever year's Form 1099-SA showed the original distribution.

Note that HSA custodians seem to be extremely bad about correcting Forms 1099-SA for this reason. They seem to expect you to report the amount as a rollover, but that's not really proper.

D

dmertz

Employee

If the distribution was returned to the HSA custodian as a return of mistaken distribution, the HSA custodian is supposed to issue a corrected 2022 Form 1099-SA, reducing the amount in box 1 by the amount returned.

A

Anonymous50Author

What if custodian is not able to do it in time?

D

dmertzAnswer

Employee

There is no time limit. If they accept a return of mistaken contribution, they are supposed to correct whatever year's Form 1099-SA showed the original distribution.

Note that HSA custodians seem to be extremely bad about correcting Forms 1099-SA for this reason. They seem to expect you to report the amount as a rollover, but that's not really proper.