Expert Alumni

Get your taxes done using TurboTax

Thank you for reminding of your particulars; it's raining questions and answers around here.


Your quote from that blog refers to two rare cases, one of which I will admit relates to you.


As I read IRS Notice 2007-22, this definition for a testing period appears to refer to FSA to HSA distributions that occurred prior to January 1, 2012.


However, more to your point, IRS Notice 2008-51 states, [For an IRA to HSA qualified funding distribution] "The testing period begins with the month in which the qualified HSA funding distribution is contributed to the HSA and ends on the last day of the 12th month following that month."


So this does pertain to you. 


However, this is all a lot of complication for a relatively small HSA contribution. Why don't you just have him take a normal distribution from his IRA (which adds to his income) for the amount of HSA contributions he was eligible to contribute for 7 months (was he under Self?), and then contribute that same amount to his HSA (which reduces his income back down again). 


In fact, he can do the HSA contribution first, so long as it's done by April 15th(see footnote***).


This will be a wash on the income side, and if you contribute no more than the correct amount ($2,623 if he was under Self coverage in 2019 and he is 55+). the transaction will accomplish what you want without the extra stress of a QFD.


Thanks for your question and discussion...and, yes, reading the Tax Code is a great deal like reading the law - because it's written by the same fellows.


***As of this edit, the IRS has announced that the filing date has been moved to July 15th, but has not updated the myriad of rules to clarify that this includes any regulations that depend on the due date of the return. So while the IRS will probably not mind you contributing to your HSA until July 15th, there is no guarantee that your HSA custodian - lacking written instructions from the IRS - will accept such a contribution after April 15th. In these uncertain times, it would seem prudent to make such a contribution by April 15th in any case. 


[Edited 3/24/2020 2:11 pm CDT - updated for July 15th]

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post