Excessive HSA employer contribution corrected within the same calendar year: do I have to report it in my tax form (if so, how?) and will I get fined?

Question

I live and work in the USA. My employer erroneously made an excessive employer contribution to my HSA, which was corrected within the same calendar year, specifically 2 days after the excessive contribution was made. Do I have to report it in my US tax forms (if so, how?) and/or will I get penalized?

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Here are the details if needed:

I received the following email:

Hello Franck: ‌ You may have noticed some unexpected year-end transactions in your HealthEquity Health Savings Account (HSA). As you know, [employer name] makes a 2024 employer HSA contribution into accounts when you are enrolled in a qualified medical plan and eligible to receive contributions.

‌ Due to an error on this year’s contribution file, contributions that were intended to be a 2024 HSA contribution, originally went into your account as a 2023 HSA contribution. These contributions went into your account on December 28, 2023. To correct the issue, HealthEquity removed the contribution from your HSA account on December 30, 2023, and then reapplied the funds as a 2024 contribution on January 2, 2024.

and here are the 2023 and 2024 HSA contributions:

The details of the HSA plan are on https://benefits.adobe.com/us/health-care/health-savings-account-hsa.

Answer 1

They should correctly report the contribution amount on your W2, and the HSA plan should issue a correct 5498-SA form with the total amount matching your W2.

It may happen that the HSA plan will issue 5498-SA with the double contribution counted and a 1099-SA for the withdrawal, in which case the withdrawal code should be "2" for excess contribution.

Since there were no earnings, no taxes should be due.

If W2 is incorrect - talk to your employer to correct it, if the 1099-SA and 5498-SA are incorrect, you can talk to the plan administrator to correct. If either of them refuse you can attach a statement to your tax return explaining the mismatch.

It appears that you got a communication from HealthEquity, which is the plan administrator, so I expect them to handle all the reporting correctly. That said, plan administrators have been known to screw reporting up before.