Hi all,
I’m looking for advice on how to fix a tax issue my family has run into for 2025.
My wife has had HSA-eligible coverage through two employers this year and is about to start a third job that also offers an HSA with employer contributions. We now realize that I should not have enrolled in a Health Care FSA through my own employer, since that disqualified her from contributing to an HSA during the months I was enrolled.
Here are the details:
I elected a $500 general-purpose Health Care FSA through my employer.
It was funded through payroll deductions ($500 over 26 pay periods), but the full $500 became available on Jan 1.
- Both my and her benefits year is Jan 1, 2025 - Dec 31, 2025.
We already used the full $500 amount mainly for dental expenses for my wife and kids.
My wife has been HSA-eligible since January 1, 2025, and has made HSA contributions through her employers.
My employer does not offer a Limited-Purpose FSA, so I don’t think we can reclassify.
Questions:
Is there any way to cancel or reverse the FSA election mid-year?
Can the FSA be reclassified or amended to avoid disqualifying her HSA?
What are our options to fix or report this on our taxes?
Will she need to withdraw all HSA contributions made while I had an FSA?
We want to proactively fix or mitigate this before tax time. Any help would be appreciated — we’re learning this the hard way!
Thanks so much!
@hsa
