New HSA Account in 2020

[BigHairyNScary]

I want to open an HSA for 2020 (today or tomorrow). The IRS paperwork is crazy. I "think" my wife & I qualify.  I decided to load TurboTax 2020 and put all my information in to see if it would fly.

The IRS paperwork states I should be able to put $8100 in the account. That's $7100.00 as we have the high deductible family plan and an additional $1000 as we are over 55, (we are 63 and not on medicare).

I put all this into TurboTax and it's telling me my contribution is $6100.00 too much.  What's wrong?

[dmertz]

First, the deadline for opening an HSA to receive a contribution for 2020 is April 15, 2021, so there is generally no rush to open and fund the HSA unless you have a medical procedure scheduled for the near future that you want to be able to pay for with a distribution from the HSA.  Medical expenses incurred before the establishment of the HSA are not permitted to be paid from the HSA.

It's probably impossible to know what entry error you made that would result in TurboTax thinking that you made a $6,100 excess contribution other than entering only a $6,100 contribution and not properly telling TurboTax that you were eligible to contribute, causing TurboTax to think that the entire $6,100 entered is an excess contribution.  It might be best to delete any Forms 8889 from TurboTax and revisit the HSA contribution section to redo the entries.

[Opus 17 · Accepted solution]

In addition to the above:

Don't use the word "we".  An HSA is owned by one and only one person.  If you and your spouse are covered by a family HDHP, and have no other disqualifying coverage, then you are both eligible to make HSA contributions, regardless of which spouse is the primary insured person, into individual accounts in your own names.  Your family limit for 2020 is $7100, this can be split between spouses any way you choose.  Your $1000 catch-up contribution is unique to you and can only be contributed to your account.  So you could contribute $8100 to an account in your name, or you and your spouse could open accounts and you could contribute $4000 to your spouse's and $4100 to yours, or any similar arrangement.  When your spouse turns age 55, they can contribute their catchup contribution only to an HSA in their own name, and assuming your spouse is still eligible (you likely won't be at that point). 

If you make your contribution in 2021, make sure to tell the bank prior to the contribution that it is designated for 2020, there may be a special form or election on the web site when you make the contribution. 

[BigHairyNScary]

We are both 63 and have eligible family health insurance from my wife's employer.

I think you are saying that we can each open an account with $4550 ($3550+$1000), for a 2 account total of $9100.00.

When I enter those numbers into TurboTax it seems to accept it without kicking back a penalty message for making a contribution the HSA that was too large.

[BigHairyNScary]

Deleting the Forms 8889 helped.  Splitting our contributions into 2 accounts made our figures acceptable to TurboTax.  Thanks for the "delete" suggestion!

[Opus 17]

Yes, your overall limit is $9100 but since the catch-up is individual, you would need separate accounts and the maximum per account is $8100.   (I misread your first post about ages and thought one of you was 55.)