I've read the other threads about HSA overcontributions in this forum, but each situation is a bit different. Detailing my issue here:
In 2023, I was employed for 9 mos and contributed to a UMB HSA via payroll. I was on an HDHP health insurance plan offered through the employer for those 9 mos. The employer did NOT make any contributions on my behalf.
Rather than opt for COBRA for the remaining 3 mos of the year after my contract ended, I enrolled through a non-HDHP plan through the ACA.
In Dec. '23, I transferred my HSA from UMB to Fidelity and contributed an additional $888 to my Fidelity HSA, seeing as the contribution limit was 3,850. (I am not age 55 yet.)
While compiling my tax return, TurboTax alerted me to the excess contribution for 2023 of $962. It said if I removed that amount before the 2023 tax filing deadline in April '24, I won't owe a tax penalty for the excess. About $76 of the $962 in excess contributions was through payroll.
Here are the steps I've taken since then:
1) Filled out the form at Fidelity to remove the excess contribution.
2) After Fidelity told me I would need to provide them the gains on the $76 that I over-contributed to the UMB HSA through payroll, I provided them that figure (~$3). Fidelity will remove the $962 total + gains on the $888 after the amount was transferred to and invested at Fidelity + the $3 in gains while the $76 was at UMB. Fidelity said that the excess removal for TY 2023 is happening in 2024, I will get a 5498-SA form only in Q1 '24. They will repatriate the total amount to my Fid brokerage account.
QUESTIONS
(based on reading this article which was posted to a prior HSA overcontribution thread: https://dpath.com/hsa-excess-contributions/)
1. Will I incur the 6% excise tax for the overcontribution considering I am removing the excess before the '23 TY tax filing deadline? TurboTax says no. If so, it is not a big amount, so I can pay the penalty and move on.
2. When and how do I report this $962 overcontribution + the gains on it to the IRS considering I won't have a Fidelity form that documents the removal of the excess until Q1 '25?
3. Will I need a new W2 from my employer for the $76 in excess contributions made through payroll? I am not sure they will provide one but can ask. There seem to be differing opinions on this on the forum.
4. I know the $76 will be considered additional taxable income. How about the $888 I contributed to the Fidelity HSA from my after-tax brokerage account? Will that be taxable also?
NOTE: I cannot apply this excess to a subsequent year as I am retired and currently not on an HDHP.
Appreciate any help you can provide. Thanks.
In 2023, I was employed for 9 mos and contributed to a UMB HSA via payroll. I was on an HDHP health insurance plan offered through the employer for those 9 mos. The employer did NOT make any contributions on my behalf.
Rather than opt for COBRA for the remaining 3 mos of the year after my contract ended, I enrolled through a non-HDHP plan through the ACA.
In Dec. '23, I transferred my HSA from UMB to Fidelity and contributed an additional $888 to my Fidelity HSA, seeing as the contribution limit was 3,850. (I am not age 55 yet.)
While compiling my tax return, TurboTax alerted me to the excess contribution for 2023 of $962. It said if I removed that amount before the 2023 tax filing deadline in April '24, I won't owe a tax penalty for the excess. About $76 of the $962 in excess contributions was through payroll.
Here are the steps I've taken since then:
1) Filled out the form at Fidelity to remove the excess contribution.
2) After Fidelity told me I would need to provide them the gains on the $76 that I over-contributed to the UMB HSA through payroll, I provided them that figure (~$3). Fidelity will remove the $962 total + gains on the $888 after the amount was transferred to and invested at Fidelity + the $3 in gains while the $76 was at UMB. Fidelity said that the excess removal for TY 2023 is happening in 2024, I will get a 5498-SA form only in Q1 '24. They will repatriate the total amount to my Fid brokerage account.
QUESTIONS
(based on reading this article which was posted to a prior HSA overcontribution thread: https://dpath.com/hsa-excess-contributions/)
1. Will I incur the 6% excise tax for the overcontribution considering I am removing the excess before the '23 TY tax filing deadline? TurboTax says no. If so, it is not a big amount, so I can pay the penalty and move on.
2. When and how do I report this $962 overcontribution + the gains on it to the IRS considering I won't have a Fidelity form that documents the removal of the excess until Q1 '25?
3. Will I need a new W2 from my employer for the $76 in excess contributions made through payroll? I am not sure they will provide one but can ask. There seem to be differing opinions on this on the forum.
4. I know the $76 will be considered additional taxable income. How about the $888 I contributed to the Fidelity HSA from my after-tax brokerage account? Will that be taxable also?
NOTE: I cannot apply this excess to a subsequent year as I am retired and currently not on an HDHP.
Appreciate any help you can provide. Thanks.
Statistics: Posted by peterw — Tue Jan 30, 2024 6:42 pm — Replies 0 — Views 137