Non-Employer Contribution to HSA not showing up on Line 25

[dconsul1]

We contributed directly to an HSA.  It was not through an employer; we are both retired so income is from our IRAs.  We did not move this from the IRA to the HSA directly.  It went to a checking account first then to the HSA administrator.  We were enrolled and still are enrolled in a high deductible health care plan.  The summary page of deductions shows our standard deduction and the HSA amount.  Then below that it says we are only eligible for the standard deduction and not the HSA deduction.  Why can't I get this on Line 25 of the 1040?

[AnnetteB6]

Use the following steps to go to the Health Savings Account (HSA) section of your return.  This is where you will find the place to enter contributions that you made directly to your HSA.  

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “hsa” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to hsa”
• Click on the blue “Jump to hsa” link and enter your information

These contributions will then be reported on Form 1040 Schedule 1 Line 12.  This information is then carried to Form 1040 Line 8a.  These line numbers are for the 2019 tax return.  The line number you referenced in your question is for the 2017 tax return, but the method to enter the information is the same.  

[dconsul1]

I was able to follow all the steps you mentioned.  I see the contribution listed, but again it is denying us the actual credit after it does the summary of deductions.  

Deductions - Standard Deduction and HSA Deduction and the total

Credits - Only lists the Standard Deduction total 

When I went through the screens, it did say something about me having a break in my HDHP in 2019.  That was not the case so I'm not sure why it even thinks that.  Is that what is messing this up?  How do we correct that if that is the issue?  

Any other suggestions?

Thx. 

[BillM223]

Let's take your issues in reverse order.

Lapse...

Your issue is with the question that asks "What type of High Deductible Health Plan did [name] have on December 1, 2018?"

Unfortunately, the question does not clarify that it is only for a small group of taxpayers and that all other taxpayers should answer "NONE".

NOTE: each spouse can have an HSA. The use of "you" below refers to whichever spouse's name was in the question above.

This question is trying to determine if you utilized the "last-month" rule in 2018 (yes, 2018). The last-month rule lets you use the full annual HSA contribution limit if you had HDHP coverage on December 1, even if you were not covered by an HDHP for all of the year.

However, the catch is that if you used the last-month rule, the IRS requires that you stay under HDHP coverage for all of the following year (2019).

***NOTE*** This question occurs on the taxpayer who does not have an HSA, so never had a chance to tell TurboTax in the HSA interview what their HDHP coverage was for 2019.

So, the fix is this: go back to the question (at the end of the HSA interview), and:

• If you had HDHP coverage for all of 2018 , then enter NONE 
• If you had no HDHP coverage for all of 2018, then enter NONE.
• If you did not have an HSA in 2018, then enter NONE.
• If you had an HSA in 2018 but did not contribute to it in 2018, then enter NONE.

Only taxpayers who had their own HSA in 2018 AND who contributed to their own HSA in 2018 should answer “Family” or “Self” or “None” (which can be the right answer in some cases).

[BillM223]

As for your HSA deduction, first I have to ask: are you on Medicare? If so, you are no longer eligible to contribute to your HSA, even if you also have HDHP coverage.

" it is denying us the actual credit" - I don't know what this means. Are you getting an error message? How do you know it is "denying" your deduction?

If you are using the Online product, please click on Tax Tools on the left, then click on Tools underneath it, then click on View Tax Summary in the center, then click on Preview my 1040 back on the left.

Then please look at line 12 on Schedule 1 of the 1040. Is your HSA contribution there? If it is, then it is being used.

If it is not, are you getting an excess contribution error message?

[dconsul1]

Entered "None" for me and it still isn't giving us the deduction.  I went back again to the first few pages and clicked that I also had an HSA since it is for both of us (joint).  That too did not help.  

Other suggestions....

[dconsul1]

We are not on Medicare.  I know it is not using the credit because it is showing us on the summary screen what credits we have and then below that what credits are being used.  Also, my bottom line has not changed since I added the HSA information so it is totally being ignored on the form.  

[BillM223]

First, there is no such thing as a joint HSA. The HSA is like an IRA in that it is owned by the individual. I know it seems like a joint account because both of you can use it, but in the eyes of the IRS, it is not.

Now, which issue are you referring to: the lapse in coverage or the HSA contribution not being deducted? These two issues are unrelated to each other.

Did you look at Preview my 1040? Is the deduction on line 12?

[Edited 3/16/2020 11:36 am CDT - typo]

[dconsul1]

Got it.  So I've gone back and reworked everything and I see the line item now on 8A on the 1040 and 12 on schedule 1.  I think it is working now based on the reduction to taxable income. 

Thx. 

[BillM223]

OK, that's the deduction issue - how about your lapsed coverage issue?

[dconsul1]

That disappeared when I answered "None"... Thx.