HSA employer contribution for dependent

Forum|Forum|2 years ago
February 20, 2024
1 reply
12 views

Need a little help here, I have a client who finished college last year and can still be claimed on his parents' return. He started a job late last year and the employer made a contribution into his HSA. He is ineligible as he is a dependent taxpayer, I keep getting an error on Form 8889 stating he is ineligible which I know, but it is wanting the box checked that states what type of coverage he has. Is there a workaround? Thanks

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dkh

Level 15

If the client is single - you mark coverage is Self Only. There will be a penalty calculated on the contribution.

J

jmbillmeyerAuthor

Level 3

I DID THAT BUT IT ERRORS BECAUSE THE CLIENT IS INELIGIBLE AS HE IS A DEPENDANT OF PARENTS, AND I AM NOT SURE HOW TO CLEAR THE ERROR?

F

Frustrated-in-IL

Level 8

Do the following steps on Form 8889:

1. Check Self-only on Line 1.

2. Check None on Line 3 smart worksheet Line A. If you get a diagnostic, ignore it. After the next step, it will resolve itself.

3. Enter the full amount of the excess contribution on Line 12 smart worksheet Line B.

You will have no errors relating to Form 8889 once this is done.

As for what needs to be done outside of the program, the excess contribution and the earnings need to be withdrawn by the due date of the return. The excess contribution will already be reported on Schedule 1, Line f if you follow the above steps. Once you know the earnings, you can report them on Schedule 1, Line z.

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