HSA Excess Contribution, Negative Earnings on Excess

twinklelalala
twinklelalala Member Posts: 2 Newcomer
in Filing my taxes

Hi,

In 2024, I overcontributed $400 to my HSA. I'm filling out the excess removal form, and I calculated the net income attribute to be -$20. This means the money returned to me from my HSA will only be $380.

How do I correctly show this on my tax return? So far I have…

Will [name] withdraw part or all of [name]'s 2024 excess contributions by April 15, 2025? → Yes
Enter the amount of 2024 excess contributions of $400 that will be withdrawn or meet the conditions above: → $400

Enter the excess earnings for these contributions in miscellaneous income on the Other Sources of Income screen. → Do I go to the miscellaneous section and enter "-$20" here?

Thank you!

Comments

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 581

    Hi Twinklelalala,

    When you have an excess HSA contribution. You have two options:

    1. Pay the excess penalty in the current year and leave it in the HSA as a contribution to next year.
    2. Withdraw the excess by April 15 and avoid the penalty

    You are choosing option #1, so Yes, that is how you report it in 2025.  Just make sure you count that $400 as part of your 2025 HSA contribution.

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