Is there a penalty for contributing in excess of the annual maximum contribution for HSAs?
Yes. If you overcontribute to an HSA, you must pay income tax plus a 6% excise tax on any excess contributions. You can avoid the excise tax if the excess contributions for the year and related investment earnings are distributed before the last day of filing federal income taxes for the year, generally April 15. If you don’t remove the excess contributions and related earnings from an HSA, you must pay the 6% excise tax for each tax year that the excess contributions remain in the HSA.
Related Questions
- If my employee exceeds their annual maximum contribution amount can they do anything to correct the mistake and avoid a tax penalty?
- If I enroll in the HDHP after January 1 but by December 1, can I still contribute the maximum annual HSA contribution for that year?
- What is the annual contribution maximum?
