If you contribute more than the annual limit to your HSA, the excess contributions are not tax-free—and they could result in penalties if not corrected.
⚠️ What to Do:
You can avoid penalties by removing the excess amount (and any earnings on it) before the tax filing deadline, usually April 15.
This makes the extra contribution non-deductible, but you won’t face an IRS penalty if it’s withdrawn properly and on time.
💸 What Happens If You Don’t Fix It?
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The excess stays in your account and is taxed as income
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You’ll pay a 6% penalty on the excess each year it remains in the account
🧠 Tip:
Many HSA administrators offer a simple way to remove excess contributions online. Just be sure to act before filing your taxes.