BillM223
Expert Alumni

Deductions & credits

"We must have an HDHP to make contributions the HSA, but we are permitted to take distributions for qualifying expenses after switching to a different insurance plan."

 

You are correct in this, and questions that state otherwise are mistaken.

 

As for the whole line 18 situation, what TurboTax is trying to do is ascertain if you used the "last-month" rule in 2018 (yes, 2018). This rule allows you to use the full annual HSA contribution in a year, even if you did not have HDHP coverage all year.

 

In your case, it sounds like you had HDHP coverage all year in 2018, so the last-month rule doesn't apply to you.

 

When you answered that you had HDHP coverage for every month in the Line 18 Smart Worksheet (you did, right?), then TurboTax should see that the last-month rule does not apply. 

 

I don't know why line C is blank, except that perhaps TurboTax lost interest when it saw that the last-month rule didn't apply. 

 

However, it does not matter. The fact that line 21 is blank means that you did not get penalized for breaking the last-month rule. Besides, the "smart worksheets" don't get sent to the IRS, just the form itself. So all the IRS will see are lines 18-21 - which means that you are OK.

**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