@Big0taxes wrote:
I'm a few years late to this particular thread. As I understand the replies, a non-working spouse can have her own HSA while qualifying through husband's HDHP and must share the maximum contribution limit but both can contribute an additional $1000 if over age 55.
Will the tax benefit be affected by only half being contributed by the husband through payroll deduction or will it all come out in the wash at the time of filing a tax return?
There is a slightly larger benefit for the spouse who uses payroll deductions.
To confirm your setup question, yes, as long as the spouse is covered by an HSA-eligible HDHP, and does not have other disqualifying coverage, the spouse can contribute to an HSA. The spouse does not have to be the owner of the plan, they just have to be covered. If the spouse does not have an employer sponsored plan, there are many banks that will open a private HSA, usually for a small monthly fee.
If the spouses have a family HDHP, the contribution limit is $7200 for 2021 and $7300 for 2022. This can be split in any convenient way, but not more than the combined total. Each spouse who is age 55 or older is also allowed a $1000 catch-up contribution, but this is individual and specific.
If the non-working spouse makes after-tax contributions, they will get a tax deduction on their federal and (most) state tax returns. If the working spouse makes contributions via payroll deduction, the working spouse gets a reduction in taxable income which will save the same amount of federal and state income tax as the deduction, assuming the spouses file a joint tax return. However, payroll contributions also reduce your taxable income for social security and medicare tax purposes, so payroll contributions save about 7.65% more than after-tax contributions.
