1040-US: Excess HSA contributions

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Question

What happens when HSA contributions exceed the maximum amount that qualifies for the deduction?

Answer

Excess contributions are subject to tax and should be included in the individual's gross income. In addition, an excise tax of six percent for each taxable year is imposed on the smaller of the amount of excess contributions or the value of the HSA at December 31, 2017. The excess contribution calculates and is reported on Form 5329, Additional Taxes on Qualified Plans and Other Tax-Favored Accounts. The value of the HSA should be reported in Screen 5329 in the Taxes folder or Screen 5498SA in the Health Care folder to accurately calculate the excise tax.

Related topic: Medical and health savings accounts FAQs (1040)

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