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Family HSA contribution $7100, why system calculate excess contribution

skyworks
Level 4

Hi,

Husband and wife enrolled as family in the  company HDHP health insurance plan. Each carried one child on the plan.

Wife contributed $5000, husband contributed $2100, total still $7100 not exceed family total for 2020.

Why the system calculate excess contribution of $1550? Is there a way I can get ride of the excess contribution tax?

Or if this excess tax will taxed every year from now on?

 

Thanks!

 

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5 Replies 5
qbteachmt
Level 15

I think we need some clarity.

"Husband and wife enrolled as family in the company HDHP health insurance plan."

Is that one policy as Family, or two policy holders? If Two, then is that two Family plans? Or two individual plans? Or one of each?

"Each carried one child on the plan."

But you cannot have "each" with "the." That's where this gets confusing. You can have Each child on Their Plans as Individual Plans. Then you find out what type of plan this is: individual or family, for Each Adult who has a plan for their name.

Is this One adult + one child per Each Family Plan or each is an Individual Plan with one named Adult carrying one named Child?

Or, The One Plan is The Plan, so there is no Each and would be All Kids on the Family Plan?

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TaxGuyBill
Level 14

@skyworks wrote:

Wife contributed $5000

Why the system calculate excess contribution of $1550?


 

Are you checking the "Family" boxes?   At first glance, tt seems like you may have accidentally checked the self-only box.

skyworks
Level 4

Yes, I checked "Family" box for both of them.

Each of them enrolled in: One adult+one child per each family plan. They have two different policy.

 

The IRS gives married couples three options:

  • Split the family contribution evenly between the spouses
  • Allocate it unevenly, according to a division both parties agree upon
  • Put 100 percent in one spouse’s account

Why the system calculate excess tax on the wife's contribution of $1550 ($5100-3500) as excess contribution? 

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rbynaker
Level 11

Unfortunately very few of us here know PTO, but you might find a Lacerte user who can point you in the right direction since they use the same back-end calculation.

In the meantime, see if you can find a place to enter box 6 on one or both forms 8889.  You'll choose how to allocate the $7,100 contribution limit between the two spouses such that neither is over the limit.  That allocation goes in box 6 of their respective forms.

skyworks
Level 4

thanks, I was able to overwrite and manually allocate from input the number flow to box 6 on both forms 8889.

 

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