Over Contribution on HSA in 2019

[Miko66]

Hi,

I always max out my HSA for years.  In 2019 my husband's job started to offer HSA - he also contributed $3800.  When we did out tax for 2019, we realized the $3800 excess contribution and paid income tax on 1040. 

My question is:  in 2022, my husband's account is now $0, do we still need to pay the 6% penalty since I have a separate HSA account?

My husband also changed job and his new company doesn't offer HSA.

What would be the best course of action? Thanks!

[Mike9241]

each of you should be reporting on a separate 8889 since there is no such thing as a joint HSA. if it's his account that was designated as the one with the excess there will be no penalty in 2022 because the 6% penalty is on the lower of the remaining excess or its fair value on 12/31/2022 which is zero. 

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 $3800 excess contribution and paid income tax on 1040.  not income tax but a 6% penalty.  then any excess that was not withdrawn by 4/15/2020 or reduced by under-contributing in 2020 was also subject to a 6% penalty and then again in 2021

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at its simplest to have an HSA the taxpayer must be covered by a high-deductible plan and have no disqualifying coverage. in the case of spouses if one has a HDHP plan both do, again as long as neither has disqualifying coverage so an HSA contribution can be at the max for family coverage.

[Miko66]

Hi Mike9241,

Thanks! This is very helpful!

As I mentioned in 2019, I contributed at the max of family coverage ($7000).  Not understanding the rules, my husband contributed an additional $3800 into his HSA.  His account now has a $0 balance.

Are you saying: IRA views our 2 HSA accounts separately? What had been over contributed to his account do not impact mine? In other words, the 6% penalty will be based on the balance of his account, not the combination of both of our accounts - even though we filed "married filing jointly"? Thanks!

[PattiF]

Yes, The IRS views the two HSA accounts separately. The penalty will be based on his account that was over contributed.

The HSA is in one individual’s name only. There is no joint HSA. Each person’s eligibility to contribute to his or her HSA is determined separately. 

@Miko66