1148963
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Attend our Ask the Experts event about Tax Law Changes - One Big Beautiful Bill on Aug 6! >> RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

HSA -last month rule

My husband changed positions and as a result - the company contribution to his HSA was reduced. Does the last month rule or anything else apply to this situation?

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
BillM223
Expert Alumni

HSA -last month rule

The last-month rule applies to how you determine your annual HSA contribution limit. It says simply that is you had HDHP (High Deductible Health Plan) coverage on December 1 of a year, then you can use the full annual HSA contribution limit regardless of how few months you had the coverage during the year.

 

The reduction in employer HSA contributions is just that: a reduction. 

 

You might consider increasing his payroll contribution to the HSA to make up fro the shortfall if his employer allows that. Otherwise you might make a direct contribution directly to the HSA. However, making contributions through payroll is better because you not only avoid federal income tax, but you also avoid Social Security and Medicare taxes on the contribution as well.

 

[Edited 3/24/2020 2:22 pm CDT - corrected typos]

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

1 Reply
BillM223
Expert Alumni

HSA -last month rule

The last-month rule applies to how you determine your annual HSA contribution limit. It says simply that is you had HDHP (High Deductible Health Plan) coverage on December 1 of a year, then you can use the full annual HSA contribution limit regardless of how few months you had the coverage during the year.

 

The reduction in employer HSA contributions is just that: a reduction. 

 

You might consider increasing his payroll contribution to the HSA to make up fro the shortfall if his employer allows that. Otherwise you might make a direct contribution directly to the HSA. However, making contributions through payroll is better because you not only avoid federal income tax, but you also avoid Social Security and Medicare taxes on the contribution as well.

 

[Edited 3/24/2020 2:22 pm CDT - corrected typos]

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question