Did I "make a contribution to a HSA based on the last month-rule"? I switched jobs in 11/16. I was in an HSA at the 1st job and started a new HSA in the 2nd job.

Forum|Forum|7 years ago
June 5, 2019
1 reply
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I am confused about the last month-rule. Because I started a new job last November, did I make a contribution to my new HSA based on the last month-rule? I was in a HSA with my previous job the entire 2016 year until starting the new job in November.

Do I answer yes or no to making a contribution to a HSA based on the last month-rule?

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Best answer by AnnetteB6

The last month rule allows an eligible person to contribute up to the maximum contribution limit to their Health Savings Account (HSA) if they are covered by a High Deductible Health Plan (HDHP) on December 1st of a tax year. The “catch” for being allowed to contribute so much to the HSA is that they must remain enrolled in the HDHP through the entire following year or there will be tax consequences.

In your case, since you remained enrolled in a HDHP for the entire year of 2016 (even though it was with two different plans), the last month rule would not apply. For it to apply, you would have had to contribute more than your ordinary monthly amount to the HSA in December of 2015 and you would have had to break your coverage in a HDHP at some point during 2016.

A

AnnetteB6Answer

Level 15

The last month rule allows an eligible person to contribute up to the maximum contribution limit to their Health Savings Account (HSA) if they are covered by a High Deductible Health Plan (HDHP) on December 1st of a tax year. The “catch” for being allowed to contribute so much to the HSA is that they must remain enrolled in the HDHP through the entire following year or there will be tax consequences.

In your case, since you remained enrolled in a HDHP for the entire year of 2016 (even though it was with two different plans), the last month rule would not apply. For it to apply, you would have had to contribute more than your ordinary monthly amount to the HSA in December of 2015 and you would have had to break your coverage in a HDHP at some point during 2016.

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