HSA contribution limit

[user17672104076]

My husband was covered by my employer-provided HSA-eligible HDHP from January through April of 2025. I calculated our allowable family contribution as $8,550 + $1,000 (catch-up for myself) for a total of $9,550 x 4/12 (pro-rating for the 4 months we were on my plan), for a contribution limit of $3,183. I retired at the end of April and went on Medicare. He joined his employer's non-eligible health plan from May through July. He began a new job at the end of July and has been covered by an HSA-eligible HDHP for himself from August 1 through December. I come up with a contribution limit for him of $4,300 + $1,000 (catch-up for himself) for a total of $5,300 x 5/12 (pro-rated for the 5 months on his HDHP) for a contribution limit of $2,208. Since he was covered by his HDHP on Dec 1, can we apply the "Last-Month Rule" to increase his contribution limit to cover the 3 months (May-July) that he was on his non-eligible plan and not covered by my HDHP? Effectively, that would be applying the Last-Month Rule, to 2025 but subtracting the 4 months (Jan-April) that he was covered by my HDHP. Is this calculation correct?

[dmertz]

I assume that the $3,183 (or at least your $333 catch-up portion of that) was contributed to your HSA, not his.  His contributions must be made to his own HSA.  Yes, the last-month rule can be applied to allow your husband eligibility for self-only coverage for May through July.  However, I think that you failed to account for the fact that using the last-month rule makes him eligible for the full $1,000 catch-up contribution, not just 8/12 of $1,000.  His contribution limit without using the last-month rule would be 5/12 of $4,300 plus 9/12 of $1,000 for a total of $2,542, but with the last month rule his contribution limit is $3,867.

Keep in mind that using the last-month rule requires your husband to remain an eligible individual throughout 2026.  If there is any month in 2026 that he is not an eligible individual, the $1,325 contributed for May through July will be subject to ordinary income tax and a 10% additional tax on your 2026 tax return.

[BillM223]

Yes, TurboTax is going to automatically apply the last-month contribution limit adjustment for any taxpayer who is 55 or over and who has HDHP coverage (i.e., you do not have to do anything). So TurboTax will apply your spouse's portion of the Self-only HDHP limit to May-July even though your spouse did not have qualifying HDHP coverage in those months.

In terms of your example, please note that the additional contribution limit for 55 and over is calculated separately from the month-by-month contribution limit calculation so you should not add the $1,000 or any part thereof to the monthly calculation as you did.

First TurboTax calculates the spouse's annual contribution limit to derive to share of the Family contribution limit for those months in which both spouses have Family HDHP coverage. The spouse's annual HSA contribution limit can be found on form 8889-S on line 3B.

Then TurboTax will calculate the primary taxpayer's annual HSA contribution limit, but remove the amount of the Family limit used by the spouse from the primary taxpayer on line 5C of form 8889-T.

Then the additional contributions for both spouses (assuming that both taxpayers had HSAs - NOTE did both you and your spouse have HSAs all year? It's not clear from your question).