@PopcornFanatic wrote:
If you have a HDHP plan with HSA that ended on the prior calendar year and contributed funds to that HSA until April/tax filing date of next calendar year, what is the appropriate way to file for this scenario? Technically the plan ended in the prior calendar year and one was not covered in the plan from Jan - April of following year - how does one account for this without being penalized since contributing up until April is allowed. Thank you so much!
Your question does not have enough facts.
For example, suppose you had a workplace plan for all of 2022. As of 1/1/23 you were enrolled in a non-eligible plan, but you kept making contributions.
First, your maximum contribution for 2022 depends on your age and the kind of insurance you had for each month, and will be $3650 for single coverage and $7300 for family coverage if you are under age 50. You may contribute up to that limit including contributions made between 1/1/23 and 4/18/23. However, contributions made during calendar year 2023 only count toward 2022 if you tell the bank in advance that it is a 2022 contribution.
If you made payroll contributions, you need to stop them, because they automatically count toward 2023. Then you need to take them out of the account as a removal of ineligible contributions. (This is a special procedure, not a normal withdrawal.) However, if you have remaining eligibility under the $3650 or $7300 cap, you could make a direct payment from your own bank account electronically or by check, as long as you tell the bank before you make the payment that is should be designated for 2022. In other words, you need to remove the ineligible 2023 payroll amounts but you could then re-contribute them as 2022 amounts, as long as the paperwork is correct.
If you made direct contributions that were designated for 2022, even after January 2023, that is allowable as long as you don't exceed your total eligibility for 2022.
If you made direct contributions that were not specially designated, then the bank will have assumed they were for 2023. You can contact the bank and ask for them to be removed and re-deposited as 2022 contributions. (They might do this in one step or they might send you the money and have you re-deposit it.)
