What are excess contributions?
The IRS sets an HSA contribution limit every year (the total amount you can contribute across all HSAs in your name).
Any contributions over the IRS's annual limit are excess contributions. If you over-contribute to your HSA, you might have to pay a 6% excise tax on the excess amount and any interest the amount has earned. You'll face this penalty each tax year that the excess contribution remains in your account.
If you are HSA eligible for the entire calendar year, then your maximum contribution limit is the maximum set by the IRS. If you are HSA eligible for a portion of the year, your maximum contribution limit is generally prorated based on the number of eligible months.
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.
Coming soon in early 2024, you will be able to withdraw the excess contributions directly from your Forma account.
Important: You have until the tax filing deadline to withdraw excess contributions. After you file your tax return, you can't withdraw the excess and will be taxed.