HSA reimbursement

[RickHeal]

I have a question regarding HSA's.  I keep getting errors on form 8889 - guess I'm not answering the questions correctly.  My daughter turned 26 on 3/31/17.  She was covered on my employers health plan until then.  Starting 4/1, she was enrolled in her employer health plan, which is an HSA.  She is single - no dependents.  I am not sure what an HDHP includes. Perhaps my employer (Samsung) health plan is considered an HDHP.  Again, how do I answer the questions related to my daughter's situation.  Thank you for your help.

[PaulaM]

What errors are you seeing? 

[RickHeal]

On form 8889T, it is asking me to indicate which months my daughter had HDHP coverage, and for self or family.  She was covered under my employers health plan as my dependent until 3/31/17 when she turned 26.  At that time, by law I can no longer cover her and she then went on her employers HSA plan.  The only way I can get Turbo Tax to stop identifying form 8889T as having errors is to do the following:

1. Indicate my daughter had a HDHP plan for Jan, Feb and March of 2017 - family plan

2. show none for Apr - Dec

I am not sure if I am filling it out properly.  It changes her tax liability from owing $$ for federal to getting a couple hundred dollars back.  That is why I want to make sure I am doing this correctly.

Thanks.  Rick

[RickHeal]

Additional info.  She is single.  Although I could cover her on my health plan at work, I have not been able to claim her as a dependent for tax purposes for a few years as she lives in NYC.  My concern with saying she has a HDHP account is that it seems the form is set up to calculate costs as if she paid for it.  Again, she did not as I covered her under my employer's plan.

[PaulaM · Accepted solution]

On her tax return, answer from her point of view only for her HSA and HDHP coverage. From her point of view, she never had family coverage (you did-report on your return). She only had her HSA/HDHP coverage from April - Dec. Indicate none for Jan-March, as this HSA/HDHP coverage was not hers.

[RickHeal]

Thank you very much.  Your advice was spot on.  Exactly the help I needed.

Sincerely, 

Rick Heal

[PaulaM]

You are welcome 🙂