HSA deduction - 2022

[Chez58]

when entering in HSA contributions ... we are both over 55 which qualifies us for additional $1000/person catch up contribution. my wife started Medicare in Sept. therefore can only contribute HSA from Jan - Aug. Publication 969 states she can contribute (including the $1000 for 8 months, see capture below) TurboTax is noting that we have over contributed ... it is calculating on the lower individual amount vs. added $1000/year. how do I get this resolved in software as it has material impact on taxes owed

[dmertz]

If your wife was only eligible to contribute to an HSA for the first 8 months of the year, her maximum catch-up contribution is 8/12 of $1000 = $666.67.  Both the regular contribution limit and the catch-up are prorated by a factor of 8/12.

[Chez58]

correct ... but the software is not allowing for the additional $1000/8 months it is assuming standard contribution

[ZhuoliA]

The maximum contribution limit is $3,100  ($4,650*8/12) after considering the additional $1000/year contribution if your wife is 55 or older and enrolled in Medicare in September. There could be other reasons you see the excess HSA contribution message in TurboTax. Please see the help article below and double-check your answers to the interview questions in the HSA section.

Why am I showing an excess HSA contribution?

[Chez58]

that is correct ... the software is only allowing me to deduct $2433. which is the $3650/12 not the $4650

so it shows an over contribution of $667. i need to know if there is an input i need to make or the software needs to be updated 

[dmertz]

Just to be clear, your wife's catch-up contribution must be made to your wife's HSA, not to your HSA, and entered into TurboTax as such.

[Chez58]

my wife and i are/were under HSA family plan like we have been for more than 10 years. 2021 were able to contribute $1000 each under that plan 

[Chez58]

thank you ... I ran the numbers outside of the software based on the IRS publication, which agrees with the other responders on this thread.

the results are different from the software ... the software is not taking in consideration the $1000/year catch up so it thinks i over contributed.

[BillM223]

Perhaps what is confusing things is that there is no such thing as a "HSA family plan". You are under Family coverage in your HDHP policy. 

As dmertz noted, an HSA is for an individual only (like an IRA). You can have one and your spouse can have one. If one of you have an HSA, you can both contribute to it and both pay expenses from it, which makes it seem like a joint HSA, but it's not.

Thus, when dmertz said that your spouse's catch-up contribution needed to be made to your spouse's HSA, this is literally the case: you can contribute $1,000 to your HSA, but only $667 to her HSA, if she even has one.

So let's try to clear this up since this is unlikely to be software error.

1. Do you have the HSA? Does your spouse have an HSA?

2. How much did you contribute to your HSA? How much did you contribute to your spouse's HSA (if one)?

Note that if your spouse does not have an HSA, then TurboTax would not allocate the 8 months of her catch-up to your annual HSA contribution limit because, as dmertz said, she would not be eligible for the catch-up (which must go to her HSA, which she doesn't have).

@Chez58