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What happens if I over-contribute to my HSA?

  • Updated
 

What are excess contributions?

The IRS sets an annual Health Savings Account (HSA) contribution limit. This is the total amount you can contribute across all HSAs in your name.

Any contributions over the IRS annual limit are considered excess contributions. If you over-contribute to your HSA, you’ll need to pay a 6% excise tax on the excess amount plus any interest earned on that amount. You'll face this penalty each tax year that the excess contribution remains in your account.

What should I do if I’ve gone over the contribution limit?

If you’ve contributed too much to your HSA, you can withdraw the amount above the limit as an “excess contribution” to avoid facing the tax penalty.

Follow the instructions below to withdraw excess contributions:

  1. Log into your Forma account > Benefits > Health Savings Account
  2. Under account details, click the link that says “withdraw the excess contributions”

  1. Select “I contributed more than the annual limit”

  1. Complete the following information:
    1. Tax year the contribution was made
    2. The amount you’d like to withdraw (the amount over the IRS annual limit)
    3. The interest earned on the excess contributions (please speak with your tax advisor on how to calculate this amount)
    4. Description (optional)
    5. Agree to the terms and conditions
    6. Continue to the confirmation page

  1. Click “Confirm and withdraw”

  1. The amount will be withdrawn from your HSA to your linked bank account in 2-3 business days. If you haven’t linked your bank account, refer to Setting up your bank account for direct deposit (ACH payments) on how to do so.

What should I do if I have mistaken contributions that are not over the IRS limit?

Follow the instructions below to withdraw mistaken contributions:

  1. Log into your Forma account > Benefits > Health Savings Account
  2. Under account details, click the link that says “withdraw the excess contributions”

  1. Select “I made a mistake with one of my contributions”

  1. Complete the following information:
    1. Tax year the contribution was made
    2. The amount you’d like to withdraw (the amount over the IRS annual limit)
    3. Description (optional)
    4. Agree to the terms and conditions
    5. Continue to the confirmation page

  1. Click “Confirm and withdraw”

  1. The amount will be withdrawn from your HSA to your linked bank account in 2-3 business days. If you haven’t linked your bank account, refer to Setting up your bank account for direct deposit (ACH payments) on how to do so.

Important: You have until the tax filing deadline including any extensions to withdraw excess contributions made for the previous year. After you file your tax return, you can't withdraw the excess and will be taxed. 

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