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New Member
posted Jun 1, 2019 1:49:24 AM

I want to use last-month rule to make max. HSA contribution for 2018, even though I was not covered by a HDHP each month of 2018. How can I enter this on TurboTax?

TurboTax only tells me what my max contribution is, and gives me only a choice of (a) taxing the excess or (b) requiring me to withdraw excess.

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1 Best answer
Level 13
Jun 1, 2019 1:49:25 AM

The last-month rule applies only if you had HDHP coverage on the 1st of December of the year (2018, in this case). If you did have HDHP coverage on 12/1/2018, TurboTax automatically applies the last-month rule and uses the full annual HSA contribution limit.

In TurboTax, you cannot elect to use the last-month rule; you either qualify or you don't.

If you did not have HDHP coverage on December 1, 2018 (coverage for the month is determined by the first day of the month) but did in some other months, then TurboTax prorates the annual contribution limit by the number of covered months divided by 12.

If you have excess HSA contributions, the most straightforward way to handle them is
  • withdraw all of the excess (if you can)
  • reduce your contributions for next year (i.e. this year, 2019) by the amount of the excess, because the excess carried over will be applied as a personal contribution in 2019.

1 Replies
Level 13
Jun 1, 2019 1:49:25 AM

The last-month rule applies only if you had HDHP coverage on the 1st of December of the year (2018, in this case). If you did have HDHP coverage on 12/1/2018, TurboTax automatically applies the last-month rule and uses the full annual HSA contribution limit.

In TurboTax, you cannot elect to use the last-month rule; you either qualify or you don't.

If you did not have HDHP coverage on December 1, 2018 (coverage for the month is determined by the first day of the month) but did in some other months, then TurboTax prorates the annual contribution limit by the number of covered months divided by 12.

If you have excess HSA contributions, the most straightforward way to handle them is
  • withdraw all of the excess (if you can)
  • reduce your contributions for next year (i.e. this year, 2019) by the amount of the excess, because the excess carried over will be applied as a personal contribution in 2019.