Question

Maximum HSA Contributions For Married Couples Filing Jointly

Forum|Forum|5 years ago
February 13, 2021
1 reply
0 views

For the last several years, I have had an HSA and a high-deductable health care plan (HDHP) through my work with coverage of "Employee + Children", while my spouse had her own health care coverage through her work which covered only her. Until September 2020, my spouse had a non-HDHP and no HSA.

Since I opened my HSA several years ago I’ve generally contributed an amount near the maximum allowed for “Employee + Children”. Because I’m over 55, the maximum HSA contribution for 2020 was $8100 and I contributed $7808. Starting in September 2020, my spouse switched to an HDHP and started contributing to her own HSA, and contributed the maximum amount for an over-55 individual ($4550) for 2020.

When I entered the HSA information for myself and my spouse in Turbotax and got to the HSA section, Turbotax is claiming that the maximum both of us can contribute is $8100, and we contributed too much. It says we need to either pay taxes on the extra amount (Turbotax claims the excess contribution is $3258) or we need to withdraw the excess contribution. We’re filing jointly.

Here's what I think is happening: When Turbotax asked who is covered by my HSA, the only options were "Family Plan" or "Self Only Plan", so I chose "Family Plan", even though it is really "Employee + Children", not "Employee + Children + Spouse". I think Turbotax is interpreting this response to mean that my HSA also covers my spouse, but it doesn’t. It seems legal for me to contribute up to $8100 for my own HSA which also covers my children, while my spouse separately contributes $4550 to her HSA which covers only her. Is this an error in Turbotax, and if so, is there some way for me to fix it?

D

dmertz

Employee

When both individuals are eligible individuals and one spouse has family HDHP coverage, both spouses are considered to have family HDHP coverage. The maximum regular contribution limit of $7,100 must be shared between the two of you. You are also permitted to make a $1,000 catch-up contribution to your HSA while your wife, also over age 55, is permitted a catch-up contribution. Normally her catch-up would be prorated for the number of months that she was eligible to contribute, but because she was covered for December she is eligible to make the full catch-up contribution of $1,000. That's a maximum combined total of $9,100. However, together you have contributed $12,358, $3,258 over the combined limit.

TurboTax's display of each individual's maximum contribution is calculated without regard to the other spouse's contributions. It only later takes into account the shared family limit to determine if the combined contributions exceed the limit.

Since you have only contributed $7,808 to your HSA, you can allocate the remaining $292 of the regular family limit to your wife, permitting her to have contributed $1,292, making her $4,550 contribution be $3,258 in excess of what she was permitted to contribute and requiring her to obtain an explicit return of this excess from her HSA.