HSA eligible dependent

Forum|Forum|7 years ago
June 5, 2019
3 replies
29 views

I graduated from full-time college in 2018 and my parents are going to claim me as a dependent, but I also made HSA contributions. I have seen there has been a rule disallowing this, but to me it seems it's more about their ability to claim my exemption. After the abolishment of exemptions, is it ok to have an HSA now and still be claimed as a dependent? This rule would seem to put people like me in a rut who just graduated and are starting a full-time job.

The IRC only mentions HSAs are not eligible if you're parents are claiming the exemption, so I am wondering about this now that exemptions are gone. Also, Pub 969 from the IRS seems to state that if you are eligible to be a dependent you cannot have an HSA. But this publication is from 2017, and I cannot find an updated one for 2018 after the TCJA.

Best answer by Critter

Sorry ... but there still are exemptions ... they were not abolished they were suspended and are worth nothing on a tax return for a while but they are still in force for all things that have a rule about dependent exemptions..... so you cannot have an HSA if you are being claimed as a dependent.

CritterAnswer

Level 15

dmertz

Level 15

As Critter#2 indicates, the exemptions were not eliminated. Instead, the exemption amount was changed to $0 for years 2018 through 2025. Because the exemption amount is $0, the line for claiming the exemptions was simply removed from Form 1040. An individual is ineligible to contribute to an HSA if they can be claimed as a dependent on someone else's tax return whether or not they are actually claimed.

<a rel="nofollow" target="_blank" href="https://www.law.cornell.edu/uscode/text/26/151#d_5">https://www.law.cornell.edu/uscode/text/26/151#d_5</a>
<a rel="nofollow" target="_blank" href="https://www.law.cornell.edu/uscode/text/26/223#b_6">https://www.law.cornell.edu/uscode/text/26/223#b_6</a>