Custodian Filed for Wrong Year

Submitted by Donald Love on Fri, 2018-09-28 10:48

I have an issue very similar to the one answered below:
https://irahelp.com/forum-post/31290-sep-ira-filed-custodian-wrong-year

The statement was made in that question that, “A SEP contribution is applied to a given year by the SEP owner, not by the IRA custodian.” Is there IRS guidance or case law that can be referenced?

Like the poster of the original question, my custodian made an incorrect filing of a contribution made Apr 4th for the current tax year instead of the previous. I’m trying to get them to file a corrected form, and they say that their classification is definitive, not how I reported it on my taxes.



Submitted by David Mertz on Fri, 2018-09-28 13:26

  • Unlike the way regular personal IRA contributions are shown on Forms 5498, a Form 5498 shows the year *in* which a SEP contribution is made, not the year *for* which a SEP contribution is made.
  • Was your contribution intended to be a SEP contribution?
  • On what year Form 5498 was it reported and in what box of that form was it reported?

Submitted by Donald Love on Fri, 2018-09-28 15:13

  • The details of my situation are different, I was just hoping to leverage information if it was quick and easy without bugging you guys too much.
  • My situation involves an HSA contribution and a 5498-SA. I made a contribution to my HSA on April 3 for 2017. This was correctly reported on my 2017 Form 8889.
  • When I got my 5498-SA, there was nothing listed in Box 3. The contribution form did not ask to specify a contribution year. The custodian’s internal policies “assumed” the contribution was for 2018 without asking one way or the other, so my 2017 contribution was not listed in Box 3. In their records, this is a 2018 contribution.
  • I’m trying to find out what determines the “official” contribution date, their internal policies or my affirmative declaration on my Form 8889.
  • I thought the statement in the original post of “A SEP contribution is applied to a given year by the SEP owner, not by the IRA custodian,” might be helpful to me as I’m building this case, as HSA contribution guidance is thin and often relies on IRA rules. I thought this might be the result of a decision in a case analogous to mine, where a custodian recorded one contribution year and the owner had another. Based on your response, I’m guessing that’s not the case.
  • I realize this is an ultra-specific issue an not directly IRA related. However, any thoughts you have would be highly appreciated.

Submitted by David Mertz on Fri, 2018-09-28 17:09

  • Information regarding SEP-IRA contributions has nothing to do with your situation.  Designating an HSA contribution for the prior year follows the same rules as for regular personal IRA contributions, not the rules for SEP-IRA contributions.
  • The IRS will go by what the custodian reports on the Forms 5498-SA.  You’ll need to amend your 2017 tax return to remove the HSA contribution for 2017 and report this contribution as an HSA contribution for 2018.  If you’ve already made a subsequent HSA contribution for 2018 that would put you over the contribution limit (or if this contribution by itself would be an excess contribution because you no longer meet the HSA eligibility requirements) you’ll need to obtain a return of excess contribution before the due  date of your 2018 tax return.
  • HSA Contributions for the prior year are quite common so it’s unlikely that the HSA custodian did not provide a way on the form to designate the contribution as being for the prior year.   By default, any HSA custodian will treat a contribution as being for the current year unless the depositor specifically indicates that the contribution is for the prior year (and is made by the regular due date of the tax return for that prior year).

Submitted by Donald Love on Fri, 2018-09-28 18:56

Thank you for responding. I know it seems surprising, but the custodian’s electronic transfer form does not ask to specify a contribution year. They don’t deny this. Their policy is that you have to go in and file a paper form for a prior year contribution, though they don’t specify this anywhere on the electronic form. Anyways, thank you for taking the time to help! It’s very much appreciated.

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