Additional Tax on Tax Favored Acct - Sch 2, Line 8 - Error?

[mcarrozza]

Something isn't flowing right and I'm wondering if someone can help me figure my error.  My client's W2 shows $6600 in employer contributions to HSA.  My client had $324 distributions.  For some reason, Schedule 2 on Line 8 is calculating additional tax but I don't understand why.  The distributions are qualified HSA expenses and that's properly marked in the 1099-SA.  I would love some help to know what is triggering the additional tax.  Thank you for your time!

[deb4]

On Form 8889 line 3 smart worksheet line A , if you don't check a box for none, self only or family a penalty could be triggered.

[Frustrated-in-IL]

More info needed.

Client filing status? Self-only or family coverage? How much tax is showing up?  Does spouse have an HSA?

From what you present, we can't tell if the contributions, the withdrawals, or both are causing the issue.  That be be gleaned very quickly.  Go to the 1099-SA worksheet and remove the $324.  If the penalty is gone, you know that is the issue.  If it is still there but changed, you know it is part of the issue.  You may have checked a box wrong, or forgot to check a box.  Generally, this is a very easy fix.

[Mel7777]

Thank you!  Yes, family coverage is marked on Line 3 Smart Worksheet

[Mel7777]

Fixed it!!!  Thank you so very much!