Question

My wife will start Medicare Part A effective Oct 23. We contributed to our HSA during Oct-Dec 2023, but shouldn't have. 2023 tax return already filed. How to remedy?

Forum|Forum|2 years ago
May 8, 2024
2 replies
0 views

Do I ask for a refund of the excess HSA contribution (and interest) and file an amended return for 2023?

Or, do I take some kind of distribution in 2024 and correct this on my 2024 return?

Thanks for any help!

TurboTax Online

G

glesieutreAuthor

I see a very similar question was asked and answered earlier this week:

"Excess HSA Contribution Problems Due to Medicare Enrollment-6 Month Rule"

M

Mike9241

assuming you had family coverage all of 2023 and all the funds went into the same HSA account, any excess would have had to been withdrawn by 4/15/2024 unless the return was properly extended then you have until 10/15/2024 to withdraw excess and earnings thereon. Tell the administrator toy want to withdraw excess contributions and earnings nit that you wan a distribution. there is no such thing as a joint HSA it's either in your name or hers. however, each spouse can have their own account. the following assumes one of you had a HDHP with family overage

for 2023 the max to your account (no spousal account) is as follows

7750 times 9 divided by 12

3850 times 3 divided by 12

+1000 if your over 55

=7775

you can leave in any excess and pay a 6% penalty. then reduce the 2024 HSA contribution by the excess and only contribute based on self only max

if you to your spouse had her own account (you didn't)

7750 times 9/12

3850 time 0 divided by 12

1000 times 9 divide by 12

=6563

any excess would need to withdrawn to avoid 6& penalty year after year until funds exhausted

if you Both have an HSA

the max is

7750* 9/12

3850 8 3/12

1000 to only your account if over 55

750 only to her account if over 55

=8525

this can be divided between the accounts any way you want as long as hers doesn't go over 6563

G

glesieutreAuthor

Thanks @Mike9241 .

I have an HDHP with family coverage. The HSA is in my name. I made no contributions to the HSA in 2024, as I mistakenly thought Medicare coverage (for both of us) would begin in January.

Our joint 2023 return was filed on time and not extended. Sounds like I should take a distribution of the excess funds from 2023 (and pay tax on it) to avoid a perpetual 6% penalty. Do I do that by amending my 2023 return or somehow addressing it on my 2024 return?

I appreciate your advice.

O

Opus 17

Employee

@glesieutre wrote:

Thanks @Mike9241 .

I have an HDHP with family coverage. The HSA is in my name. I made no contributions to the HSA in 2024, as I mistakenly thought Medicare coverage (for both of us) would begin in January.

Let's start over. I think there are facts missing.

In short, if you are the owner of the HSA account, then your ability to contribute is determined by your insurance, not your wife's. If you each own separate HSAs, your ability to contribute is determined by each spouse's specific coverage situation. There is no such thing as a joint or "our" HSA.

1. You say that you were covered by a family HDHP. I assume this is a qualifying HDHP for HSA contributions (not all HDHPs qualify.)

2. Who is the owner of the HSA? Remember that an HSA is an individual account, there are no joint HSAs so it can't be "our" HSA. Any person covered by an HDHP can contribute to an HSA even if they are not the owner of the insurance policy. You and your wife could have separate HSAs, or only one of you has one, but you can't have a joint HSA.

3. What was the HSA owner's medical coverage in 2023? What months were they covered by an HDHP, and what months (in any) were they also covered by "other insurance", because it is the other coverage that makes them ineligible to contribute.