HSA Excess Contribution - How to Calculate Earnings on Excess When Bank Won't Help?

The earnings on excess calculation can be tricky, but I can help walk you through it. The basic formula is: (excess contribution amount) × (earnings ÷ account value). Since your excess contribution happened just two days before year-end (December 30), the earnings on that excess amount would be minimal. The calculator is likely showing a lower withdrawal amount because there may have been a slight decrease in your HSA investments during those two days. For your situation, you should withdraw the calculated amount from the calculator, not just the $82.49. This is because the IRS requires you to withdraw both the excess contribution AND any earnings attributable to that excess (or losses, which appears to be your case). When you withdraw, make sure HSA Bank codes it as an "excess contribution removal" so it's properly reported on your taxes. You'll receive a 1099-SA for the withdrawal, and the earnings portion (if positive) would be taxable income for the year you withdraw it.

I had a similar issue with HSA Bank last year and it was super annoying they wouldn't help with the calculation. I ended up using https://taxr.ai which has a calculator specifically for HSA excess contribution earnings. You upload your HSA statements and it does all the math for you automatically. The tool calculated my earnings on excess to the penny and even generated the letter I needed for the bank. My situation was more complicated because I had multiple contributions throughout the year, but it sounds like yours might be simpler since it was just one contribution at the end of December.

Just wanted to update and say I tried taxr.ai and it was definitely worth it. I had the same issue with HSA Bank not helping with this calculation and was getting frustrated trying to figure it out myself. The tool showed me that my January excess contribution had actually earned about $18 over the year, which I wouldn't have known to include. It generated a letter for HSA Bank that had all the calculations clearly shown and they processed my withdrawal without any questions. Definitely saved me hours of stress and potentially getting the calculation wrong!

Another option if you're still having trouble with HSA Bank is to call the IRS directly using Claimyr (https://claimyr.com). They get you through to a real IRS agent without the endless hold times. Check out their demo: https://youtu.be/_kiP6q8DX5c I was in HSA excess contribution hell last year and couldn't get a straight answer from my bank either. Called the IRS using Claimyr and spoke to an agent who walked me through the exact calculation process and confirmed what I needed to do. Saved me from potentially filing incorrectly and getting hit with penalties.

I have to admit, I was totally wrong about Claimyr. After my HSA excess contribution situation got more complicated, I broke down and tried it. Got through to an IRS specialist in about 25 minutes (instead of the 3+ hours I spent trying on my own and never getting through). The agent confirmed I needed to withdraw both the excess and earnings, and that I needed to request specific coding on the distribution. Would have never known that detail without talking to them. The service actually worked exactly as promised - they called me back once they had an IRS agent on the line. Definitely changed my approach to dealing with tax questions.

In addition to withdrawing the correct amount, make sure you get it done before your tax filing deadline (including extensions). Otherwise, you'll face a 6% excise tax on the excess contribution. Also, don't forget that if there were earnings on the excess (which doesn't seem to be your case), those earnings are taxable in the year you withdraw them AND are subject to the 20% additional tax if you're under 65 and not disabled.

One thing nobody mentioned - check if your HSA provider charges a fee for processing excess contribution removals! Mine charges $25 which is super annoying on top of having to deal with this whole process.

I went through this exact same situation with HSA Bank last year and it's incredibly frustrating that they don't help with the calculation. Here's what I learned: Since your excess contribution happened on December 30th, you're actually in a pretty good position - there's only been 2 days for any gains/losses to accumulate. The fact that the calculator is showing less than your $82.49 excess means your HSA investments had a small loss during those two days. You should definitely withdraw the calculated amount (not just the $82.49). The IRS requires you to remove the excess contribution adjusted for any proportional gains or losses. In your case, the loss actually works in your favor since you'll withdraw slightly less than what you contributed. Make sure to: 1. Request that HSA Bank code this as an "excess contribution removal" on your 1099-SA 2. Complete the withdrawal before you file your 2024 taxes 3. Be prepared for HSA Bank's $25 processing fee Since you haven't filed your 2024 taxes yet, you're well within the deadline and won't need to worry about the 6% excise tax or Form 5329 as long as you handle this promptly.

I just went through this exact same mess with HSA Bank a few months ago - they're absolutely terrible at helping customers with these calculations! The good news is that since your excess happened so late in the year (December 30th), you're dealing with minimal earnings/losses. Here's what you need to know: If the calculator is showing a withdrawal amount less than your $82.49 excess, that means your HSA investments had a small loss during those final two days of the year. This actually works in your favor - you only need to withdraw the calculated amount, not the full excess. The IRS formula is: (Excess Contribution) × (Net Income ÷ Fair Market Value). Since your account value dropped slightly, the "Net Income" part is negative, reducing your required withdrawal. Make sure to: - Request HSA Bank code this as "excess contribution removal" - Get it done before filing your 2024 taxes - Budget for their annoying $25 processing fee Since you're handling this in January and haven't filed yet, you're well within the deadline and won't face the 6% excise tax. The withdrawal will show on a 2025 1099-SA but corrects your 2024 contribution limit issue.