Discussion:HSA - Family vs Individual

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Discussion Forum Index --> Advanced Tax Questions --> HSA - Family vs Individual


Discussion Forum Index --> Tax Questions --> HSA - Family vs Individual

Umk395 (talk|edits) said:

23 December 2009
Husband works from Jan - Mar 2009 and has his own individual HSA. He puts $2,000 in his own HSA in March 2009.

In May 2009, wife sets up a FAMILY HSA and funds $5,950 (for her and husband).

Is this situation allowable? Doesn't seem like they can exceed the max contributions via this arrangement. Any insight would be appreciated.

Jdugancpa (talk|edits) said:

23 December 2009
IRC 223(b)(2) Monthly limitation.

The monthly limitation for any month is 1/12 of—

(A) in the case of an eligible individual who has self-only coverage under a high deductible health plan as of the first day of such month, $2,250.

(B) in the case of an eligible individual who has family coverage under a high deductible health plan as of the first day of such month, $4,500.

(The 2009 limits are $3,000 and 5,950)

Hubby: 3000 X 4/12 = $1,000

Family 5950 X 8/12 = $3,967

Total = $4,967

(I think your comment that "Husband works from Jan - Mar 2009" is a red herring. The issue is not was he working, but rather, was he covered for the full four months by an HDHP)

Umk395 (talk|edits) said:

23 December 2009
Thanks -- appreciate it.

Merry Christmas!

Bertkdo (talk|edits) said:

23 December 2009
Jdugan, under your calculation, it looks like your saying the total allowable contribution for this couple is actually less than the limit for taxpayers with family coverage. The way I understand the new rules that went into effect in 2007 (see IRC Sec 223(b)(8)(A)) is that if you are have family coverage as of the last day of the year, you are still eligble to make the maximum contribution as if you were covered for the full year (there are some nasty lookback provisions if taxpayer becomes covered by non HDHP coverage in proceeding 12 months, but I won't get into that). Based on this, I believe the maximum total contribution allowable is the $5,950. This maximum will generally be assumed as split 50/50 between but the taxpayers may elect to allocate it any way they want.

Jdugancpa (talk|edits) said:

23 December 2009
Yes, it appears you are correct. Shows the need for more than 60 seconds of reading/researching.

IRC 223(b)(8) Increase in limit for individuals becoming eligible individuals after the beginning of the year.

(A) In general. For purposes of computing the limitation under paragraph (1) for any taxable year, an individual who is an eligible individual during the last month of such taxable year shall be treated—

(i) as having been an eligible individual during each of the months in such taxable year, and

(ii) as having been enrolled, during each of the months such individual is treated as an eligible individual solely by reason of clause (i) , in the same high deductible health plan in which the individual was enrolled for the last month of such taxable year.

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