This is a bug and is still not fixed as of Feb. 23.
The bug is that 2025 Do It Yourself Premium Online TurboTax is trying to use the "Last-Month Rule" because it incorrectly thinks I did not have a HDHP in January 2024.
100% confirmed that if you switch HSA in January from "self" to "none" that the extra income is not applied.
If I switch my January 2024 HDHP coverage from "none" to "self", it applies extra income plus 10% penalty thinking that I broke the "last-month rule"
My Setup: I had a HDHP every month of 2024 and contributed the max amount of $4,150 to my HSA in 2024. In 2025 I had a HDHP for 10 of the 12 months. During the 2 months of not having a HDHP I did not contribute to my HSA.
Some people have been saying just to leave January 2024 as "none" to trick the software, but I will not be making false statements. I should not have to lie to the tax software that I am paying $99 for to get it to work.
Since TurboTax has known about this bug and have not fixed it in over 3 weeks, I will be switching to another tax software that has earned the $99 fee.
I have been using TurboTax for over 8 years and I am very disappointed that they are de facto forcing me to switch to another company.
