Amount shown on form 5329, line 47 is labeled "excess contribution" but it is being pulled from form 5329-T Line 47 which is Total HSA contribution. How to correct?

Forum|Forum|1 year ago
February 4, 2025
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Please explain why HSA tax penalty calculation appears to be incorrect?

larry-lasdayAuthor

Correction: the amount from form 5329 line 47 is being pulled from form 8889 line 2.

BillM223

Form 8889 line 2 are your "personal" HSA contributions, i.e., contributions NOT through your employer. It is also the amount of the excess HSA contributions from the previous year(s).

You are describing a situation where your personal contributions (if any) are in excess for the current year. This can be caused by two things:

You did not go through the HSA interview, nor told TurboTax what kind of HDHP coverage you had nor for how many months, or
The amount of excess from the previous year fully completed this year's HSA contribution limit, so your current year contributions were all in excess.

In either case, we need you to possibly update your entries in the HSA interview.

How much were your HSA contributions for 2024?
How were they made, through your employer or directly?
What kind of HDHP coverage did you have (Family or Self-only)?
How many months did you have this coverage?
Did you carry over any excess contributions from 2023?

This will give us a good start.

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larry-lasdayAuthor

Thanks for your response. Here is what is driving my question. I started receiving Medicare in October of 2024. At the time, I did not realize that meant I could no longer make HSA contributions through my employer's payroll deduction process. Since I made $715 of contributions post Oct 1, I requested and received a check for these $715 of excess contributions. I know I have to show this $715 as other income on schedule 1, but did not know mechanically how to accomplish that in TurboTax. My problem was that form 8889T "calculated" an excess contribution of $537 instead of $715. Since I could not figure out a way to change the Turbotax calculation, my solution was to add the $178 delta to schedule 1 under other income (8Z) with a comment.