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M
maw10401
Level 3
March 24, 2021
Question

HSA distributions include excess HSA contribution to avoid penalty

  • March 24, 2021
  • 1 reply
  • 7 views

Taxpayer contributed too much to HSA.  Distributions reported on 1099SA includes withdrawal of excess contributions.  How do i enter this in Lacerte to avoid penalty on excess contribution and show it was withdrawn?

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1 reply

M
maw10401Author
Level 3
March 24, 2021

I figured it out.  You need to enter the excess contribution as withdrawn on screen 32.1 on excess contributions withdrawn by due date.  Then enter a 1 on the same screen about 8 lines lower that says "1=reduce distributions by excess contributions withdrawn".  This will eliminate the form 5329 and penalty calculation and include the excess being withdrawn on form 8889 line 14b reducing the HSA distributions by the excess contribution withdrawn. 

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