HSA excess contribution for 2020

[waynehatch]

I have a client that had HSA contributions of $7,100 which is fine. She is married and her husband does not have an HSA. However on her 5229, line 48 it shows an excess contribution of $6,100. I just can't find where that came from. Even though she had only $345 in distributions and an account value over $15K, that indication of excessive contribution is causing and additional $300 in tax. .I want to get that out but can't find the source. Anyone have any idea?

[TaxGuyBill]

Look at Form 8889.  Does it show a TOTAL of $7100 of contributions, or does it show more than that?

Does the 8889 have the "family" boxes checked?

Were the HSA contributions made through the employer (Code "W" in Box 12 of the W-2), or were they made outside of the employer?  Make sure you don't indicate she made non-employer contributions if they were all made through her employer.

[waynehatch]

Thanks for the suggestions and I checked that all out. The only difference is there is an extra $1,000 allowed because her husband is over 55 which the software entered automatically.

[TaxGuyBill]

If the husband does not have a HSA, there shouldn't be $1000 allowed for him.  Do you have the HSA (or W-2) assigned to the correct spouse (and are you looking at the correct 8889 (taxpayer/spouse)?

[waynehatch]

I will look at that in the morning, but the problem is not the $1,000, the problem is the excessive contribution. I will think about the connection. Actually I think somehow I did have an 8889 for the husband and deleted it. Need to back track that. But I have run a review on this return and there are no errors. The HSA is definitely the wife’s. She is a Qualcomm employee. It is coded in her W2. The husband works elsewhere but does have an employee health plan. Actually they both have health plans for around $8K. Not sure how that would cause an excessive contribution to the HSA but will look at that.

Thank you for your help.

[qbteachmt]

You told us he doesn't have an HSA. You cannot put His Money into Her HSA account. They should have Family Coverage, HDHP, and he gets his own account and they can put any amount of their family limit there, but the minimum would be His $1,000 makeup amount.

[TaxGuyBill]

You may want to delete the W-2, the 8889, and anything else related to the HSA.  Then re-enter them, but only enter one thing at a time to see how the numbers flow and if they are showing up correctly.  That MIGHT help you figure out the problem.

[waynehatch]

He doesn’t have an HSA and I do not have any entry that would relate to that.The $1K is her make up. That was generated by the software and is correct. If I override it it actually makes the add on tax go up a bit but doesn’t change the $6,100 on line 47 and 48 of the 5329. It is computer generated. The cross references are no help. If I override that I will have an error and won’t be able to file. All the boxes that I see are checked as family plan.

[waynehatch]

Thanks,

I have done that a bit at a time. I will try for the whole thing tomorrow. I will include the 1099 SA also.

[qbteachmt]

You have made this comment two different ways, and other conflicting info:

"there is an extra $1,000 allowed because her husband is over 55"

"The $1K is her make up."

Who exactly is the Old person? If that is Him, you cannot put that into Her HSA. He would need his own account. And for her to put anything into his account, her policy needs to be Family coverage.

But now, you also stated he has a different coverage. So, he doesn't qualify for HSA, because he is covered by other insurance, additionally to her family plan. Or, if he specifically is not covered under Her plan (such as, she has herself and kids on her Family plan), then he isn't qualified under her plan, she can't put into his account, and he can't put into his account for having a non-HDHP coverage.

You can use web resources, such as:

https://www.wageworks.com/takecare-myhsa/health-savings-account-faqs/