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Why do I have to fill out 2017 hsa stuff?

1 Reply
Level 13

Why do I have to fill out 2017 hsa stuff?

It's a long story...

It is possible that you took advantage of the "last-month" rule in 2017. This rule allows you to use the full annual HSA contribution limit, even if you had not been under HDHP coverage the entire year, so long as you were covered on December 1, 2017.

However, the catch is that if you used the last-month rule, then you had to stay under HDHP coverage for all of 2018, or face possible penalties. And obviously, we wouldn't know if you stayed under HDHP coverage for all of 2018 until you did your 2018 return.

So everyone who didn't show HDHP coverage for all of 2018 gets asked the question, "What type of HDHP coverage did you have on December 1, 2017?" If you answer "Self" or "Family", you are likely to get a "lapse in coverage" message.

If you get a lapse in coverage message, you are asked a number of things about 2017, because TurboTax has to recalculate your 2017 HSA contribution limit based on the number of months you actually had coverage, and if your actual 2017 contributions exceeded that, then you would be penalized.

So, you see, there really is a good reason for TurboTax to ask about 2017, even if it's hard to understand why.

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