Question

How TT flags excess HSA contribution of $8,100 if the combined contribution for myself, and spouse was $7,000? (both working, one >55yo, filling jointly ) ?

Forum|Forum|4 years ago
April 6, 2022
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TurboTax Premier Online

Employee

Do you have separate HSA accounts? Only the HSA account owned by the spouse over 55 is eligible for the catch-up contribution. Go back through the interview and make sure you have your HSA accounts linked to the correct owner.

For 2021, your maximum combined contribution to an HSA – that is, the sum of what you, your employer, and anyone else contributed – is $3,600 if you're covered by an individual (self-only) HDHP and $7,200 if you're covered by a family HDHP (maximum contributions increase to $4,600 and $8,200, respectively, if you were at least 55 years of age on December 31, 2021).

You can’t both make the catch-up contributions to the same account -- your spouse will have to open a separate HSA for his or her catch-up contributions. Each HSA is an individually owned trust account, similar to an IRA, and each catch-up contribution must be made separately to your own account.

There are penalties if you have an excess contribution to your HSA unless the excess amount is withdrawn before the due date of your return, including extensions.

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A

arlindo4ncAuthor

clarification

Spouse 1 ( over 55 ) contributions in 2021 to his account $ 4,300 ( self + employer contributions), have answered int the interview that had a family HDHP

Spouse 2 (under 55 ) contributions in 2021 to her account $ 2,800 ( self + employer contributions), have answered the interview that had a self plan with HDHP

TT tells me that there was an excess of $8,100 ( that is more than what was contributed by both of us combined ).

Then says that I can allocate $2,800 to one of us from the excess....

Is this a bug?

R

RaifH

I would check your entries in TurboTax. You are well under the contribution limit, so either TurboTax has miscalculated your contribution limit based on the information you entered or the contributions entered do not match what was actually made. If your contributions were made from your W-2s, start there:

After entering your W-2 with the Code W in Box 12, it should have asked Did any of your HSA contributions go into your spouse's account? Answer No, assuming that each of you made separate contributions to your own HSA.
This should have opened an area on your tax return for HSAs. If you do not see it, go to Federal > Wages & Income > Less Common Income > 1099-SA, HSA, MSA and click Start/Revisit.
Make sure both of you have HSA selected.
If you made any withdrawals from your HSA, you should receive a 1099-SA and answer Yes to Did you use your HSA to pay for anything in 2021? Otherwise, select No.
Assuming you did not inherit this HSA, select No.
Under Let's enter your HSA contributions your employer amount should already be in there from the W-2. Unless you made additional contributions, leave Any contributions you personally made blank. Do not re-enter your contributions that have already been accounted for by the amount on your W-2.
Answer the questions on the next two screens, then make sure you answer the question related to your HDHP correctly on the next screen. If you had family coverage the entire year, you should not be penalized for excess contributions.
Go through the questionnaire again for your spouse's HSA. Make sure their employer contributions are in there or enter the contributions if they were made out-of-pocket. Indicate they had self-only coverage all year.

Even though you had family coverage and your spouse had self coverage, your maximum contribution should be $8,200 total since one spouse was over 55. $7,200 is the maximum contribution for a family no matter what plans they had before accounting for the additional contribution for those age 55 and above.