HSA max contribution is $0?

[saarak]

I'm a single person, and switched jobs this year. My new job has a HDHP and I contributed $1400 over 4 months. I selected "Self Only" coverage for the 4 months, and "None" for the other months, since I had a non-HDHP at the previous job. Turbotax is telling me my max HSA contribution is $0. Any idea why??

[BillM223]

Because HSA contributions are not done the way you think.

Most taxpayers have HSA contributions contributed by payroll deduction. When you get your W-2, you will see a code W in box 12, which is the sum of all your payroll deductions for the HSA and whatever your employer kicks in.

When your W-2 is printed, the code W amount is removed from Wages in boxes 1, 3, and 5. So, there is no "deduction" for this type of contribution, because it was never in your income in the first place.

But you can also make contributions directly to the HSA custodian, not through your employer. These contributions (if any) are shown on line 13 of Schedule 1 (1040). This is the deductions that you see on the HSA Summary.

A majority of taxpayers do it the way you do: through payroll deduction. You don't see any "deductions" but you get the benefit all the same because your income is reduced.

[saarak]

Thank you so much - that is a great explanation. I appreciate it! 🙂

[Opus 17]

@BillM223  is correct in some respects, but it doesn't answer the question, and your question is a bit odd.

If you were covered by a single HDHP for 4 months, your contribution limit is $1383 if you are under age 55.  If you were covered by the HDHP on December 1, and you plan to be covered for all of 2025, the last month rule means your contribution limit for 2024 is the full amount of $4150.

What Bill is saying is that, if you contribute by payroll deduction, the contribution is already removed from your taxable wages, so you don't get an extra tax deduction (the deduction was already built in to your paycheck). 

But there's a difference between not getting a deduction, and what your contribution limit is.  If Turbotax thinks your limit is $4150 due to the last month rule, then your $1400 payroll contribution is fine, and you could even contribute more by making a direct deposit to the HSA and taking it as a deduction.  But if Turbotax thinks your contribution limit is zero, then the $1400 is being added back to your taxable income, and you are being assessed a penalty, and you are being recommended to remove the excess (unallowed) contributions.   Which might mean there is a problem with how you answered the questions on insurance coverage.

So do you want to clarify, was your question about additional deductions, or contributions?  Can you look at your tax summary or form 8889 and see if you are being assessed a penalty?