topic Deductions & Credits-HDHP in Deductions & credits

Deductions & Credits-HDHP

dimples65 — Sat, 08 Feb 2020 23:24:18 GMT

Why does TurboTax think my spouse had a lapse of coverage? The question before this is What type of HDHP did my spouse have on 12/1/18? to which we answered "Family" since he met the eligible individual criteria. There has never been any lapse of coverage so what question is triggering that there is a lapse of coverage?

Re: Deductions & Credits-HDHP

JotikaT2 — Mon, 10 Feb 2020 19:15:14 GMT

Try the following:

Review your input for your HSA contributions and distributions.

In order to do this, go to the Federal section of the program and select "Deductions & Credits".

Select Medical (you may have to select see all if you do not see this option)
Under Medical, select "HSA, MSA Contributions"
Follow the screens and answer the questions
Enter any information from any 1099-SA forms.
Confirm whether the distributions were used on medical expenses.
Confirm if you or your spouse were covered under a "High Deductible Health Plan" (HDHP).
Please confirm the year as you answer the questions.
If it refers to the coverage under an HDHP in 2018, please answer None in all of the following situations:
- You had an HSA in 2018 but did not contribute
- You had HDHP coverage for all of 2018
- You had no HDHP coverage for all of 2018
- You did not have an HSA in 2018
By answering None to all of the options in 2018, the error message regarding the lapse in coverage will go away and you will be able to proceed with your return.

I have attached a link to additional information regarding HSA's to help you confirm you meet all of the requirements.

HSA contributions

[Edited 02/10/20|11:14am PST]

Re: Deductions & Credits-HDHP

steve695 — Sun, 09 Feb 2020 03:45:38 GMT

going back to the original question that TurboTax asks whether my spouse has

a HSA we assumed it meant a separate 1099-SA but the program makes an error if not answered YES

Re: Deductions & Credits-HDHP

JotikaT2 — Sun, 09 Feb 2020 20:55:31 GMT

It would actually be referring to a separate High Deductible Health Plan, not a 1099-SA form.

If she is covered under your family plan, then you would select None for her.

If she has her own HSA plan, then you would select Yes for her.

Re: Deductions & Credits-HDHP

steve695 — Mon, 10 Feb 2020 01:28:12 GMT

that solution does not work within the turbotax guided program, there is an obvious error

Re: Deductions & Credits-HDHP

BillM223 — Mon, 10 Feb 2020 22:20:17 GMT

Your issue is with the question that asks "What type of High Deductible Health Plan did [name] have on December 1, 2018?"

Unfortunately, the question does not clarify that it it for a small group of taxpayers and that all other taxpayers should answer "NONE".

This question is trying to determine if you or your spouse utilized the "last-month" rule in 2018. The last-month rule lets you use the full annual HSA contribution limit if you had HDHP coverage on December 1, 2019, even if you were not covered by an HDHP for all of 2019.

Using the "last-month" rule requires that you stay under HDHP coverage for all of the following year (2019).

Note that this question may be asked of each spouse, so follow what I write below and apply it other only to the spouse whose name is in the question.

***NOTE*** This question applies only to taxpayers who had HDHP coverage in 2018 and who made HSA contributions to his or her own HSA in 2018; otherwise, they could not have benefited from the last-month rule.

So, the fix is this: go back to the question (at the end of the HSA interview), and if you did not contribute to an HSA in 2018 or not even have an HSA in 2018, then answer NONE.

I know that that is not what the question asks, but believe me, the question does not apply to taxpayers who don't have an HSA, even if they have HDHP coverage.

If you had HDHP coverage for all of 2018 , then enter NONE

If you had no HDHP coverage for all of 2018, then enter NONE.

If you did not have an HSA in 2018, then enter NONE.

If you had an HSA in 2018 but did not contribute to it in 2018, then enter NONE.

Re: Deductions & Credits-HDHP

pablo3 — Sat, 15 Feb 2020 12:16:58 GMT

Thanks for explaining why we need to answer this way and acknowledging the inclarity of the question. Thanks much to you both @JotikaT2 and @BillM223