I was a dependent covered by my parents health insurance in 2018. Am I still eligible to claim deduction for their HSA, MSA Contributions?

[BMcCalpin]

No, only the owner of the HSA (one of your parents, or both, if they both have HSAs) can claim the deduction for a contribution to an HSA.

[clebrowns6]

I graduated from full-time college in 2018 and my parents are going to claim me as a dependent, but I also made HSA contributions. I have seen there has been a rule disallowing this, but to me it seems it's more about their ability to claim my exemption. After the abolishment of exemptions by the TCJA, is it ok to have an HSA now and still be claimed as a dependent? This rule would seem to put people like me in a rut who just graduated and are starting a full-time job.

[TaxGuyBill]

@clebrowns6   The TCJA has not changed anything in this regard.  If your parents are eligible to claim you as a dependent, you are not allowed to contribute to an HSA.

However, you may want to double check if your parents are able to claim you as a dependent.  If you paid for over 50% of your own support for the entire year, *OR* if you have established that you have PERMANENTLY moved out from your parents for MORE than 6 months of the year, your parents are not eligible to claim you as a dependent.

[clebrowns6]

@TurboTaxBillMc I may still qualify, the 50% support test will be tough to decide. Is there a place where you note this when filing (if you aren't eligible as a dependent), and do they require substantiation that you did provide over half? I would find this difficult to prove.

[TaxGuyBill]

You just need to 'run the numbers' to see if you provided over 50% of your own support:
<a rel="nofollow" target="_blank" href="https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf...>

There is no where to note that, but if the IRS questions it, you would need to prove it.  Also, you would need to make sure that your parents do not actually claim you.

[clebrowns6]

@TurboTaxBillMc I will take a look. If it comes down to it, I've done some research and I can probably just withdraw all my HSA contributions similar to excess contributions before I file, without incurring the 20% unqualified expenses penalty. Is this a viable option?

[TaxGuyBill]

Yes, but it makes it easier if you tell them to remove the "excess contributions", rather than doing a regular withdrawal.

But you and your parents still need to determine who is eligible to claim you.

[clebrowns6]

Yes, I will figure that out. So if I am eligible to be a dependent but not claimed as one, can I have an HSA?
Thanks for the help by the way.

[TaxGuyBill]

No, if you are eligible to be claimed, you do not qualify for the HSA.