HSA overpayment

Old Jun 20th 2016, 11:53 pm
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Default HSA overpayment

My employer has overpaid into my HSA putting over the maximum allowable IRS limit for the year. Will this be a problem at tax time? I work for an employer that is too big to do things correctly which makes life hard. Has anyone had experience of trying to get money out of an HSA for non-medical reasons?
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Old Jun 21st 2016, 12:04 am
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Default Re: HSA overpayment

Originally Posted by mrken30 View Post
My employer has overpaid into my HSA putting over the maximum allowable IRS limit for the year. Will this be a problem at tax time? I work for an employer that is too big to do things correctly which makes life hard. Has anyone had experience of trying to get money out of an HSA for non-medical reasons?
Why don't you ask your employer to correct their error?
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Old Jun 21st 2016, 2:18 am
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Default Re: HSA overpayment

Originally Posted by Giantaxe View Post
Why don't you ask your employer to correct their error?
I tried that but they outsourced their hr department and they are as useful as a chocolate teapot. They came back and told me to speak to the hsa company, who then tells me to speak to my employer. What happens if I just ignore it?
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Old Jun 21st 2016, 2:25 am
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Default Re: HSA overpayment

Originally Posted by mrken30 View Post
I tried that but they outsourced their hr department and they are as useful as a chocolate teapot. They came back and told me to speak to the hsa company, who then tells me to speak to my employer. What happens if I just ignore it?
Presumably contributions get reported to the IRS:

"If you over-contribute to your HSA, you must pay income tax plus a 6% excise tax on any excess contributions and related earnings for each tax year the excess contributions remain in your HSA. To avoid the excise tax on excess contributions, remove the year's excess contributions and related investment earnings before the last day to file federal income taxes for the year, generally April 15."

https://crewconnect.vanguard.com/tot...ributions.html

https://www.discoverybenefits.com/em...tions-handled-

If the over-contribution was for the 2015 tax year, the second link implies that the excess will have already been reported as income on your W2.

Last edited by Giantaxe; Jun 21st 2016 at 2:28 am.
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Old Jun 21st 2016, 2:32 am
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Default Re: HSA overpayment

Unless you are in dire need of getting the money back, I wouldn't stress about it at all, because it all "comes out in the wash" anyway when you do your tax return.
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Old Jun 21st 2016, 3:56 am
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Default Re: HSA overpayment

Consider yourself lucky your company contributed the max. Pay tax on the rest. It is still free money.

Or do you mean they f'd up your elective amounts that you paid in?
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Old Jun 21st 2016, 6:11 am
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Default Re: HSA overpayment

Unfortunately is wasn't free money, it was money that came out of my pay check. I was more concerned about being audited, a 6% hit isn't too bad, only couple hundred dollars or so. It's just annoying because it wasn't my doing. If the company won't fix it I will just take time off to compensate. I don't think this will just "come out in the wash" because the HSA company has the money and pays interest or mutual fund gains/losses on the money. They basically paid a whole pay check into HSA instead of into my bank account and I had already been paying the maximum amount per month.
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Old Jun 21st 2016, 11:19 am
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Default Re: HSA overpayment

So have you now already paid too much into your HSA, or has this just put you on a trajectory to have over-contributed by the year end?

I was talking about your income tax for 2016 coming out in the wash - you only get a deduction for the maximum permitted contributions, and if you contribute AFTER tax money to your HSA it isn't a tax issue. I am not 100% certain but I believe that as I have maxium HSA contributions each year, and that Mrs P has an HSA which she is allowed by her employer to contribute half as much as me, we are probably over-contributing, .... but the tax deductibility all comes out in the wash, so I am not in the least bit concerned about it.
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Old Jun 21st 2016, 12:12 pm
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Default Re: HSA overpayment

You can withdraw the excess before the filing deadline and pay normal tax on it or leave it in and pay normal tax plus 6%
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Old Jun 21st 2016, 1:39 pm
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Default Re: HSA overpayment

Originally Posted by Pulaski View Post
So have you now already paid too much into your HSA, or has this just put you on a trajectory to have over-contributed by the year end?
Yes , I have now paid over the $6750 maximum allowed for the year
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Old Jun 21st 2016, 1:54 pm
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Default Re: HSA overpayment

Originally Posted by mrken30 View Post
Yes , I have now paid over the $6750 maximum allowed for the year
So you have stopped all further contributions, I assume.
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Old Jun 21st 2016, 1:56 pm
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Default Re: HSA overpayment

Originally Posted by Pulaski View Post
So you have stopped all further contributions, I assume.
I hope, my employer controls the contributions. I have very little control except to say I want to contribute the maximum per year.
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Old Jun 21st 2016, 2:09 pm
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Default Re: HSA overpayment

Originally Posted by mrken30 View Post
I hope, my employer controls the contributions. I have very little control except to say I want to contribute the maximum per year.
Your employer sounds inept, at best.

It's a long time since I worked for an employer who consistently sçrewed up my pay, but I was a regular visitor to their payroll office, most memorably ten times in thirteen weeks one summer.

Last edited by Pulaski; Jun 21st 2016 at 2:22 pm.
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Old Jun 21st 2016, 2:41 pm
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Default Re: HSA overpayment

The most scary thing is , if you live on the West coast , this may well be your health care provider. I just hope they treat the nurses and doctors better.
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Old Jun 21st 2016, 4:01 pm
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Default Re: HSA overpayment

Originally Posted by mrken30 View Post
The most scary thing is , if you live on the West coast , this may well be your health care provider. I just hope they treat the nurses and doctors better.
Irony not a big thing then in your company...?
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