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June 4, 2019
Question

My w2 shows an employer contribution to my HSA acct. I haven't made any withdrawals from the acct, I'm claimed as a dependent & not enrolled in a HDHP.What do I put down?

  • June 4, 2019
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1 reply

June 4, 2019

I do not understand. If your employer was not providing you HDHP coverage, why on earth would they make a contribution to your HSA? The employer should know that no HDHP coverage equals no HSA contributions.

You have two choices.

One, if the employer (and not you through payroll deduction) made the HSA contributions (code W in box 12 of your W-2), they contact your employer and ask them to (1) ask the HSA custodian to return the money to them (not you), and (2) issue you a corrected W-2. Note: you will probably want to file an extension to give all this time to get done.

Two, if you did make contributions through payroll deduction or if the employer won't go for #1, then read the following:

Because you were able to be claimed as a dependent (even if you weren't), you were not eligible at all to contribute to your HSA in 2018. This is different from making an excess contribution (although TurboTax treats it in a similar way).

So you will tell TurboTax in the HSA interview that you did not have HDHP coverage at any point in 2018 (Check "no" to "Did you have High Deductible Health Plan coverage for any month in 2018?"), and TurboTax will declare all the contributions in 2018 as excess. You will need to withdraw this amount or as much as you can before April 15, 2019. Be sure to tell the HSA custodian that you are requesting the "withdrawal of excess contributions" so they will report it correctly to the IRS. The excess conrirbutions will be sent to you and you will be taxed on them.

In the Review, you may get new errors. If you do, this is how you address them:

1. If the Review asks you to check a box on Line 1 of form 8889, go ahead and check "Self" (It won't matter, but it will help get you clear of the Review).

2. If the Review asks you to check a box in the Line 3 Smart Worksheet of form 8889, go ahead and check "None" for A1 through A12 (i.e., each month).

2. If the Review asks you to check a box in the Line 18 Smart Worksheet of form 8889, go ahead and check "None" for B1 through B12 (i.e., each month).

This should clear the form 8889 errors and let you e-file.

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