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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28380
Experience:  Taxes, Immigration, Labor Relations
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I am 70 years old and receive social security benefits (No

Customer Question

I am 70 years old and receive social security benefits (No medicare payments). I an still working and my employer is contributing to an HSA. I did not know this. Now, I think I have a tax problem. What can I do?
Submitted: 12 months ago.
Category: Tax
Expert:  Lev replied 12 months ago.

To be an eligible individual and qualify for an HSA - you must be covered under a high deductible health plan (HDHP) and you are not enrolled in Medicare.

If you are enrolled in Medicare - beginning with the first month you are enrolled in Medicare, your contribution limit is
zero.

If you are not eligible for HSA - that means - you have excess contributions if the contributions to your HSA for the year are greater than the limits.

.

Expert:  Lev replied 11 months ago.

You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions.
--You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made.
--You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings.

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Generally, you must pay a 6% excise tax on excess contributions. See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. The excise tax applies to each tax year the excess contribution remains in the account.

That form is attached to your tax return.

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