What this line means
The amount of excess contributions to your Health Savings Account at the end of the year. For 2025, HSA contribution limits are $4,300 for self-only coverage and $8,550 for family coverage (with an additional $1,000 catch-up for those 55 and older). Employer contributions count toward these limits. Any amount over the limit is an excess contribution subject to a 6% penalty.
Does this apply to you?
- You contributed more than the annual HSA limit for your coverage type
- You made HSA contributions during months when you were not enrolled in a high-deductible health plan
- You had employer HSA contributions that, combined with your own, exceeded the annual limit
- You had excess HSA contributions from a prior year that remain uncorrected
Easy to overlook
Employer contributions count toward your HSA limit If your employer contributed $2,000 to your HSA and you contributed $3,000, your total is $5,000. For self-only coverage with a $4,300 limit, you have a $700 excess. Filers who max out their own contributions without accounting for employer deposits trigger the 6% penalty. Check your W-2 Box 12, code W, for the combined employer and employee contribution total. 1 IRS Publication 969 — Health Savings Accounts
The contribution limit is prorated if you were not HSA-eligible all year If you enrolled in a high-deductible health plan partway through the year, your HSA contribution limit is prorated by the number of months you had eligible coverage. Enrolling in July gives you 6/12 of the annual limit. The last-month rule is an exception — if you are HSA-eligible on December 1, you can contribute the full annual amount, but you must remain eligible through the following December or face taxes and penalties. 2 IRS Form 5329 instructions — Part VII
Watch out for this
Ignoring the 6% penalty because HSA excess contributions seem small. A $500 excess costs only $30 per year in penalties, so filers sometimes let it ride. But the 6% penalty recurs every year the excess remains in the account. Over five years, that $500 excess costs $150 in penalties. Withdrawing the excess before the filing deadline eliminates the penalty entirely.
Footnotes
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IRS Publication 969, Health Savings Accounts, Contribution Limits. https://www.irs.gov/pub/irs-pdf/p969.pdf ↩
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IRS Form 5329 Instructions, Part VII. https://www.irs.gov/instructions/i5329 ↩