CLP

So the HSA was opened in 2023. I thought I had until April 15th of 2025 to make the corrections and pull the funds out so that I do not have to pay the excise tax. How do I file my 2023 taxes with a 1099 that says I used HSA funds, but I am not eligible to have an HSA?

Thank you for the detailed response. One other question... If I return the money I used from the HSA in 2023 and remove the balance from the account, all before April 15th 2024, will I need to have a corrected 1099-SA for tax year 2023. BOA keeps saying that I will not receive a corrected form, but will see the transactions listed on the 1099 I receive from them in 2025. This seems incorrect to me as I will have to file taxes with a 1099 saying I withdrew regular distribution from my HSA. Seems like one of the purposes of a corrected form is the situation that I have found myself in. Please advise...

I started a new job in 2023. I have never had an HSA before and that was all that my employer offered. My wife has always had an FSA. Later in 2023, I realized there was an issue with me having HSA and her FSA. I spoke with the custodian (Bank of America) and they keep telling me that since we are on individual plans, then our current arrangement is not an issue. However, everything I see says that her FSA is allowed to be used for a spouse even if they are not on the health care plan. This, by default, means I am not allowed to have an HSA. Is Bank of America just not understanding the situation? I would think they should know, but I am nervous to leave things as is if that means I am stuck with a penalty at tax time. Thanks for any feedback!