Federal employees- will mypay allow you to over contribute to HSA?

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Topic Author
Lrt12
Posts: 39
Joined: Mon Jan 15, 2018 2:20 pm

Federal employees- will mypay allow you to over contribute to HSA?

Post by Lrt12 »

Federal employee here. Family HSA maxed out with last paycheck. I submitted a request to mypay to change my HSA allotment to $0. I checked today and the change is not reflected. Also, it is giving me an error message when I try to change it now. Is anyone aware if the system will stop contributions that will be over the limit? I have contacted payroll but usually do not have much luck getting things done there.


Thank you!
lakja
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Joined: Mon Nov 06, 2017 5:34 pm

Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by lakja »

Yes, mypay will allow you to make an overpayment.
Topic Author
Lrt12
Posts: 39
Joined: Mon Jan 15, 2018 2:20 pm

Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by Lrt12 »

lakja wrote: Sat Jun 06, 2020 1:57 pm Yes, mypay will allow you to make an overpayment.
Any tips on steps to fix this issue?
lakja
Posts: 109
Joined: Mon Nov 06, 2017 5:34 pm

Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by lakja »

Did you make any overpayment for the full year ($7100 family or $3550 individual)? This also includes contributions made by your plan.

If the answer is no, then just reduce future contributions to not exceed yearly limits.

If the answer is yes, fill this form out: https://www.hsabank.com/hsabank/~/media ... tributions
Topic Author
Lrt12
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Joined: Mon Jan 15, 2018 2:20 pm

Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by Lrt12 »

lakja wrote: Sat Jun 06, 2020 2:04 pm Did you make any overpayment for the full year ($7100 family or $3550 individual)? This also includes contributions made by your plan.

If the answer is no, then just reduce future contributions to not exceed yearly limits.

If the answer is yes, fill this form out: https://www.hsabank.com/hsabank/~/media ... tributions
Yes- I have already contributed $5300 for the year and my employer contributes $1800, so I will be over. Appreciate your help!
gclancer
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Joined: Sat Apr 27, 2013 10:34 am

Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by gclancer »

Lrt12 wrote: Sat Jun 06, 2020 2:08 pm
lakja wrote: Sat Jun 06, 2020 2:04 pm Did you make any overpayment for the full year ($7100 family or $3550 individual)? This also includes contributions made by your plan.

If the answer is no, then just reduce future contributions to not exceed yearly limits.

If the answer is yes, fill this form out: https://www.hsabank.com/hsabank/~/media ... tributions
Yes- I have already contributed $5300 for the year and my employer contributes $1800, so I will be over. Appreciate your help!
You should still go through payroll to resolve the issue rather than remove the excess contribution via HSA Bank. Your contribution was made pre-FICA tax which will need to be resolved. So long as it’s addressed during calendar year 2020 your payroll office should be able to fully resolve the matter (HSA Bank can’t fully resolve the matter without going back through your payroll).
Flora
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Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by Flora »

Similar situation for 2020 but excess MyPay HSA contribution was already withdrawn directly from Fidelity.

Does anyone know if VA payroll can correct this by withholding the necessary FICA and Medicare after the fact and moving the excess from pre-tax to regular wages so that the W-2 will be accurate?

Or is it too late because Fidelity will issue a 1099R for the withdrawn excess?
Spirit Rider
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Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by Spirit Rider »

gclancer wrote: Sat Jun 06, 2020 8:21 pm You should still go through payroll to resolve the issue rather than remove the excess contribution via HSA Bank. Your contribution was made pre-FICA tax which will need to be resolved. So long as it’s addressed during calendar year 2020 your payroll office should be able to fully resolve the matter (HSA Bank can’t fully resolve the matter without going back through your payroll).
This is not correct.

There is no IRS requirement that excess contributions must be resolved through payroll. Excess contributions and earnings are routinely returned by HSA custodians. The FICA exemption on those excess contributions need not be and never are recovered.
lstone19
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Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by lstone19 »

Another issue could be will the custodian accept the excess. A few years back, my employer, thanks to rounding, tried to over-contribute to my HSA by $0.08. The custodian, I think it was Payflex, rejected the entire final contribution. Of course this was the 12/31 payroll and it took them a few weeks to straighten things out with the correct amount to max it for the year finally sent to the custodian and the $0.08 refunded to me on a subsequent payroll (and FWIW given the small amount, subject to all withholding taxes).
motorcyclesarecool
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Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by motorcyclesarecool »

Spirit Rider wrote: Sat Jun 06, 2020 9:28 pmThe FICA exemption on those excess contributions need not be and never are recovered.
:shock: :shock: :shock: :shock: :shock: :shock: :shock:
So I can exempt myself from FICA by as much as my payroll office allows me to pass through to my HSA? And there’s no FICA clawback?

Can you point me to your sources?
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.
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wander
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Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by wander »

Lrt12 wrote: Sat Jun 06, 2020 1:55 pm Federal employee here. Family HSA maxed out with last paycheck. I submitted a request to mypay to change my HSA allotment to $0. I checked today and the change is not reflected. Also, it is giving me an error message when I try to change it now. Is anyone aware if the system will stop contributions that will be over the limit? I have contacted payroll but usually do not have much luck getting things done there.


Thank you!
You don't contact payroll for this issue. Instead, you should contact the HSA custodian bank and ask them how much money you want them to remove from your account for excessive. They will be happy to help you.
Topic Author
Lrt12
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Joined: Mon Jan 15, 2018 2:20 pm

Re: Federal employees- will mypay allow you to over contribute to HSA?

Post by Lrt12 »

My plan is to fill out the HSA excess contribution form linked by @lakaja. The funds won't deposit until 6/12 or 6/15, so I will have to wait until then. Realized the error was mine in stopping my contribution. Lesson learned. So as long as I get the excess removed in 2020, I shouldn't have to fill out additional paperwork come tax season, correct? I am hoping there won't be any gains sitting in the HSA Bank account for only as long as it takes for them to issue the refund.

Appreciate everyone's help!
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