AnnetteB
Intuit Alumni

Deductions & credits

No, you did not meet the testing period.

According to the IRS Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans (https://www.irs.gov/pub/irs-pdf/p969.pdf), the testing period begins on the last month of your tax year (December 1st) and ends on the last day of the 12th month following that month (December 31st of the following year).  You would have needed to be an eligible individual on December 31st, 2016 in order to meet the testing period. 

This means that a portion of the contributions that were made to your Health Savings Account (HSA) in 2015 based on the last month rule will be included as income on your 2016 tax return because the testing period was not met.  The amount included as income will also be subject to an additional 10% tax. 

Take a look at the Publication 969 on page 5 for more details and some examples to illustrate the concept.