BillM223
Employee Tax Expert

Deductions & credits

For the months that you had Family HDHP coverage, then you spouse had Family HDHP coverage, without regard to the Self-only policy that your spouse may have had through her/his own job.

 

There is no such thing as a "self HSA". The words Self and Family refer to the type of HDHP policy that you have. And if one of you has a Family HDHP policy, then you are both considered to be covered by a Family HDHP policy. This is not obvious, but it's the way that the IRS wants it.

 

Once your spouse was covered by a non-HDHP policy (I assume that this was in September 2022), then your spouse should report "NONE" for that month (and following).

 

As for the reduction, it's not your limit that is being reduced, it's your spouse's. As you noted, TurboTax is calculating what your spouse's annual HSA contribution limit would have been if your spouse would not have used the last-month rule. This usually results in an increase in tax. However, the situation you have is complex because your spouse could have fallen back on the Self-only coverage in the calculation.

 

Remember that any part of the $7,00 that is used by your spouse is taken away from you and your child. It's not that you and your child get $7,300 AND your spouse get $7,300 - you two have to share the $7,300.

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