Short answer: If you overcontribute to your HSA, you should withdraw the excess amount and any earnings on it by the tax filing deadline to avoid a 6% annual penalty.
If you contribute more than the IRS allows to your Health Savings Account for a given year, the excess contribution is not tax-free and can trigger penalties if it is not corrected.
You can usually fix the mistake by withdrawing the excess contribution along with any earnings attributable to it before the federal tax filing deadline, typically April 15 of the following year. When done properly and on time, the excess amount is treated as non-deductible, but no penalty applies.
If the excess contribution is not removed, it remains in your HSA and becomes taxable income. In addition, the IRS imposes a 6% excise tax on the excess amount for each year it stays in the account.
The penalty continues to apply annually until the excess is corrected or absorbed by lowering contributions in a future year, if allowed.
Most HSA custodians provide a specific process or form to request a return of excess contributions, which helps ensure the correction is handled correctly for tax reporting purposes.
Sources
- IRS, FAQs on Health Savings Accounts: Excess Contributions: https://www.irs.gov/faqs/health-savings-accounts-hsas
- IRS, Publication 969: Health Savings Accounts: https://www.irs.gov/forms-pubs/about-publication-969
Content history
Originally published: March 27, 2025
Last reviewed: June 16, 2026