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Deductions & credits
As we discussed, your husband's FSA is allowing a carryover not a grace period. A grace period has a definite ending. But the carryover could last all year - you admitted that you did know when the money would run out.
As I noted, you can't be in a position of being able to pay for expenses from both the FSA and the HSA at the same time.
As I also noted, this is unknown territory, the idea of when you can started contributing to an HSA when you are not currently signed up for an FSA but are enjoying the carryover of FSA funds from the previous year. So there is no hard and fast rule here.
You just have to document what you choose to do and why, in case anyone else asks.
"The testing period on the regulation is "12/1/2025-12/31/2026" for the 2025 year's contribution" Yes, I know it says that but you can't have HDHP coverage on December 1st for the "last-month rule" without already being covered for the month of December, so 1/1/2025 to 12/31/2025 would make more sense. It would be one year and not 13 months.
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