Leftover Funds From 2018 HSA

BIGxRED — Wed, 05 Feb 2020 02:38:58 GMT

I had both a high-deductible health plan (HDHP) and HSA for 2018. I made monthly contributions to my HSA in 2018. For 2019, I dropped the HSA in favor of a lower deductible health plan. I did not make any contributions to my HSA in 2019, but was told by my employer that I could continue to use my HSA for health expenses (which is what I did). I do not believe my HSA was rolled over.

Should I be taxed for the money that was left over in my HSA for 2019? TurboTax is telling me that I don't have to include any income because of the Last Month Rule. However, it's not clear to me as to why that applies in my case. I had an HDHP from 1/1/2018 - 12/31/2018. I did not have an HDHP from 1/1/2019-12/31/2019.

Any clarification on this is appreciated.

Re: Leftover Funds From 2018 HSA

MinhT1 — Wed, 05 Feb 2020 02:54:09 GMT

If you did not have a HDHP in 2019, you cannot open or contribute to a HSA, but you can still use your existing HSA to pay for your out=of-pocket medical expenses. If all distributions from the HSA were for medical expenses, they are not taxable.

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Leftover Funds From 2018 HSA

Re: Leftover Funds From 2018 HSA