My wife and I both went on Medicare last year (July for her, November for me). Prior to that, we had HDHP coverage and contributed to an HSA in 2019. When completing my 2020 taxes, Turbotax is claiming that I have to report $1333 as income because of the Last Month Rule because we did not have HDHP coverage for all of 2020. But once we went on Medicare, we could not contribute to an HSA by law and thus did not have an HDHP plan. We were on the HDHP plan for 10 months in 2019 and I contributed the appropriate pro-rated amount.
Do I really get hit by the last month rule in this case, or is Turbotax wrong? I am likely going to change the number to $0 and let the IRS complain if they think I really am covered by it.
And what will happen with next year's taxes if I fund the HSA for 2020, which I can still do until tomorrow? Obviously I can only fund it for a partial year.
