Question

Spouse and HDHP/HSA question

Forum|Forum|4 years ago
February 25, 2022
1 reply
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This is the most confusing area on Turbo Tax! Everybody questions this, and seems like everyone has a different situation!

Primary Tax payer & Spouse both have separate SELF only coverage. 2021 Spouse coverage was all year regular medical plan (optima). Primary tax payer had regular medical from Jan-July 2021 then company was bought out and new insurance was HDHP from Aug thru Dec 2021. So on question "COVERED BY HDHP IN 2021" i selected "YES-Covered at least 1 month" and for "WHAT TYPE OF HDHP COVERAGE" selected "had different plan types at different times of year", then on "TYPE OF HDHP COVERAGE" indicated Jan-July NONE and Aug-Sept SELF.

Then comes the dreaded "WHAT TYPE OF HDHP DID X HAVE ON 12/1/20?" Based on all the other responses to this I select NONE, even though Self only makes more sense but leads TT to ask about coverage lapse. It then asks "WHAT TYPE HDHP DID SPOUSE HAVE 12/1/20?" which I answer NONE because spouse has always had SELF Optima medical plan.

I think I have done this correctly but would like confirmation before I file.

M

Mike9241

agreed Turbotax does a terrible job in phrasing questions, especially the 12/1 question.

i find it difficult to believe that the use of the last month's rule if you have HDHP coverage and no disqualifying coverage, is mandatory and not voluntary.

under the LMR since you were covered by a HDHP on 12/1/21 you could make a full year's contribution to your HSA. however, if you do this you must maintain HDHP coverage and no disqualifying coverage for 12/1/2021 through 12/31/2022.

however, let's say your max for 2021 is $3600. proration for the months you had HDHP would allow contribution of 5/12 of $3600 = $1500. then if you had Non HDHP coverage during the period 12/1/2021-12/31/2022- there would be no excess contributions for 2021