Answered: How can I get rid of a penalty on an over contribution to an HSA withdrawn before the end of the year?

khudson · ‎12-06-2019

IntuitCharlene · ‎12-06-2019

There are 2 ways to remove the Penalty. IF the contributions were through the W-2 then on the 8889 go to the Line 12 Excess Employer Contributions Smart Worksheet and enter the amount of line B. If the contributions were entered directly on line 2 the Tax Help for line 2 states "Do not include any excess contributions that were withdrawn by the due date of the return. As noted in the IRS instructions to line 13 of this form, such amounts are treated as if they had not been contributed."

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IntuitCharlene · ‎12-06-2019

There are 2 ways to remove the Penalty. IF the contributions were through the W-2 then on the 8889 go to the Line 12 Excess Employer Contributions Smart Worksheet and enter the amount of line B. If the contributions were entered directly on line 2 the Tax Help for line 2 states "Do not include any excess contributions that were withdrawn by the due date of the return. As noted in the IRS instructions to line 13 of this form, such amounts are treated as if they had not been contributed."

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rbynaker · ‎12-06-2019

All I can offer at this point is that the 2018 software functions differently than the 2017 software. It looks broken to me, but it could just be they want it entered a different way. I entered the same info in 2018 and 2017 and got a completely different result.

This is the first we've heard of it in the community so it might not be a known bug. You may need to call support to report it.

There's an "Ask me anything" going on, so you might also try asking there.

Rick

rbynaker · ‎12-06-2019

@Charlene_At_Intuit any reported bugs on HSA corrective distribution programming in 2018?

IntuitCharlene · ‎12-06-2019

I'm not seeing anything reported yet. Let me test a few things out and get back to you.

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IntuitCharlene · ‎12-06-2019

Were these contributions through the W-2 Box 12 Code W or self made on the 8889?

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rbynaker · ‎12-06-2019

Thanks. I don't know about the OP, but I tried a simple entry of 1099-SA code 2 for the corrective distribution and entries on the 8889-T for the contributions but couldn't get it to work without overrides. You might also pull up 2017 and make the same entries there for comparison.

rbynaker · ‎12-06-2019

Great, thanks! If you convert this to an answer I'll Recommend it.

IntuitCharlene · ‎12-06-2019

Done and Done

Glad to help!

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How can I get rid of a penalty on an over contribution to an HSA withdrawn before the end of the year?

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