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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
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: 9 months ago.
Category: Tax
Expert:  Lev replied 9 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 9 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You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions.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--You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings.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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