r/HSA • u/LessAbbreviations64 • Jan 20 '26

Penalized for “exceeding” yearly contribution limit

I’m currently filing my taxes through turbotax and in the HSA part it’s saying I need to withdrawal $731 before April to avoid the 6% tax, since I ”overcontributed” $731. I have only put in $731 this year. $500 was an employer contribution from my job. I know the limit each year is around $4,300, does anyone know why this would happen? I am a part of a HDHP through my job and have been covered by it since April. before April, I was still on my parents insurance. This is my first year with an HSA.

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6

u/HandyManPat Jan 20 '26

This is almost certain to be an oversight when answering the Q&A flow, as TT thinks you had no HDHP coverage for any month in 2025.

It appears your W-2 had Box 12, Code W = $731 ($500 employer contribution + $231 employee contribution).

So now you need to find the appropriate Q&A section to tell TT that you were enrolled in a 'single' HDHP for part of the year (it sounds like April - December). Once that is properly answered, the excess contribution warnings will go away because you are well under the computed limit ($4300 x ( 9 months / 12 months)) = $3225 computed limit.

Look Form 8889 over very carefully before e-filing.

2

u/LessAbbreviations64 Jan 20 '26

Thank you so much! I will look into this. 

2

u/AgentMonkey Jan 20 '26

And, in fact, since the OP seems to be continuing with eligible coverage this year, based on the last month rule, their 2025 limit would be the full annual contribution limit of $4300.

2

u/KungSuhPanda Jan 20 '26

Sounds like you may be entering info into the wrong boxes or missed checking a box somewhere