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2 separate HSA accounts, how to treat and check it?

Due to employment change, I now have 2 separate HSA accounts.  I am married, filling jointly. 

Both HSAs have been contributed to, both by 2 employers and myself. How do I check that the amount on both W2 is treated properly and not taxed? 

 

my situation is that I had a family coverage via HD plan for the first 6 moths of 2023, then not covered for 4, and than again for the last 2 months. I would assume allowed contribution is pro rated for 6+2 = 8/12 of the year. Can i contribute full $7,750? OR 8/12*$7,750 = $5167? Who knows? It doesn't really matter for me, i am below both ammounts in my case...

 

When I typed my in 1099-SA, my refund went up slightly. BUT i still see only one of the 2 contributions. first employer contrib for the first 6 months was $3,125 (and i see it in my HSA summary on the 1099-sa tab of turbotax) second one is $869 for the second employer, for the last 2 months, with new hsa and new employer. 

 

How can I proceed? How do I verify that both HSA contributions are indeed treated tax free, which is what i belive is correct? 

 

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4 Replies
DavidD66
Expert Alumni

2 separate HSA accounts, how to treat and check it?

If the HDHP that you had at the end of the year was a family plan, you qualify for the maximum family contribution under the Last Month Rule.  If you are eligible to contribute to an HSA on the first day of the last month of your tax year, you are considered eligible for the entire year, provided you stay enrolled in an HSA qualifying HDHP.   There is a testing period of twelve months. This means you must stay eligible through the end of the next year (2024), or you will be subject to taxes and penalties. 

 

Under the Last Month rule, you can contribute a combined total of $7,750 to your HSA accounts, plus an additional $1,000 if you are 55 or older.  

 

When entering your 1099-SA, be sure to indicate the amount of the distribution that was used to pay qualified medical expenses.  Otherwise it will be taxable.  You can see whether any of your distributions are showing as taxable by reviewing Schedule 1 (Form 1040), Part I, line 8f.  To review your Form 1040 in TurboTax Online, see the following Help Article:  

 

How do I preview my TurboTax Online return before filing?

 

To verify your contributions are properly reported, you can revisit the HSA entry section.  You can also review Form 8889 in your tax return.  To review this form you will have to 

 

If you want to review your return you will need to pay for TurboTax and then you will be able to print your entire return or specific forms/schedules prior to filing.  You will still be able to make changes prior to filing. Follow these steps to print a preliminary copy of your return in TuboTax Online:

 

  • While logged in and working on your return, click on My Account 
  • From the drop down menu click on Print Center 
  • Click on Print, save or preview this year's return 
  • On the next screen click on Continue to pay by credit card
  • Submit your payment information and you will be able to print your tax returns

I suggest you print as a PDF fIle.  

 

Note, you must pay by credit card in order print or preview your preliminary return.  You will not be able to pay using your federal tax return.

 

[Edited 02-26-2024, 1:25 pm PST] 

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2 separate HSA accounts, how to treat and check it?

you file only one 8889 in your return for both HSA accounts since these are both your accounts. be careful with multiple W-2s that one isn't coded as being for your spouse  The amounts should appear on each w-2 in box 12 coded with a W. The total of the two amounts should flow to the same 8889-T on line 9

 

 

you are correct on what type of coverage to check for each month when you get to the medical expense section the HSA link. To be an eligible month you must be covered by an HDHP on the first day of that month. if you were you're eligible to contribute 8/12 of the full-year $7750. However, because you were covered on 12/1/2023 by a family HDHP under the last-month rule you can make a full year's contribution ($7750) by making up the difference personally  by contributing to one of the accounts by 4/15/2024 (7750 less the amount on line 9 of the form assuming you made no other personal contributions). There is a catch, however, to avoid being penalized for excess contributions if you use the last-month rule you must remain covered by a family HDHP for the entire year 2024.

 

entering the 1099-SA should not have affected your refund assuming the code is 1 in box 3. The form only reports distributions from your HSA not contributions. form 5498-SA reports the contributions. You should get 2 because of the two accounts. the total of these two should match the total on line 9.

 

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2 separate HSA accounts, how to treat and check it?

Ok, it appears that it is wrong. 

On form 8889 line 9, i see $3,125 but not the total with the second $869 from the second employer, for the last 2 months, with new HSA and my new employer. What now? Should it not be $3,994 <= 869+3125?

 

form 1040, schedule 1, part I, line 8f is empty (and that is probably correct)

PaulaM
Expert Alumni

2 separate HSA accounts, how to treat and check it?

Yes, it should be the total of the two, $3,994. Go back and review your W-2s. There is a question that reads 'Did any of your HSA contributions go into (spouse's name) account? Select no, for each of your W-2s if this was your HSA. If you missed it, it will not record the amount on the Form 8889.

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