Rectifying post-tax contribution to an HSA while ineligible, 6% excise tax already paid
Summary of User’s Issue and Solutions Discussed:
- Main Problem: The user mistakenly contributed to their 2023 HSA while being ineligible due to coverage under a family non-HDHP plan and is seeking a way to undo the contribution and get refunded the 6% excise tax paid for the ineligible contribution.
- Solution: The user can correct the mistake through the Return of Excess (ROE) process by filling out the ROE form provided by Fidelity.
- Additional Information: To process the ROE request, sufficient cash must be available in the HSA account; otherwise, the request will remain pending.
- Follow-Up: Once the ROE amount is calculated, a letter with further details will be uploaded to the user’s Documents page on Fidelity.com.
Here’s the full thread
Hey, so I’m new to the world of HSAs and yesterday I mistakenly contributed to my 2023 HSA which I learned I was completely ineligible for as I was also covered by a family non-HDHP plan. I already filed my amendment with the IRS and paid the 6% excise tax for ineligible HSA contributions, but is there a way to undo my contribution for the 2023 year and get refunded the 6%? I’d imagine there’s a penalty-free way to do this if it’s all done before April 15, 2024.
If it helps, all of the $3,850 I contributed yesterday for 2023 is ineligible
+ I am unable to withdraw as I don’t think the cash has cleared yet, but I’m not even sure if this is the right way to withdraw or transfer back to checking without penalties
Thanks for making your way over here, @ulzzang!
When you over-contribute or mistakenly contribute to a Health Savings Account (HSA), you can correct this through the Return of Excess (ROE) process by filling out the ROE form linked below.
HSA Return of Excess form (PDF): https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/customer-service/HSA-return-of-excess-contributions.pdf
Depending on volumes, ROE requests can take a few business days to process. In addition to the excess contribution, we use an IRS calculation method to determine if any earnings or losses associated with the excess contribution must be removed. As such, you may wait until the final figure to be removed has been calculated and processed.
Please note that to process your ROE request, you will need sufficient cash in your account. If you do not have enough cash, the ROE request will remain in a pending status.
Once an ROE amount has been calculated, a letter with additional details will be uploaded to your Documents page on Fidelity.com. You can view the letter by clicking the “Accounts & Trade” tab and choosing “Documents.” Expand “Other Documents” on the following page and select “Account records.”
If you have further questions or need assistance through the process, our Fidelity HSA team is an excellent resource for you. Associates are available Monday through Friday, 8:30 a.m. – 8:00 p.m., ET, and can be contacted through the link below:
Contact Us: https://www.fidelity.com/customer-service/contact-us
Please let us know if we can help with anything else! 🙂 🟢
Brilliant! Knowing this is also recorded in Documents is great to know, thank you : ) @FidelityCaitlin
You’re very welcome! 🟢