Accidental Removal of Excess Contribution
Hello-
If client makes an IRA contribution and then accidentally removes it as an excess contribution (even though it was a valid contribution) can they re add the money as a contribution?
Do you know if it matters if it is an HSA versus an IRA?
Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2025-01-22 15:23
As long as a contribution is removed as a specific return of a contribution including gain/loss, it could be recontributed up to the due date for the return. That said, many custodians will block such new contributions and the taxpayer may have to go through customer service to bypass the system or make the contribution to a different custodian’s IRA.
5498 forms would report the total of the two contributions, but there is no excess as long as one of them was properly removed.
Should be the same for an HSA.