Why does TurboTax allow me to deduct HSA contribution when I am on Railroad Medicare and have a HDHP?

[BillM223 · Accepted solution]

From what I see, "Railroad Medicare" is just Medicare under a slightly different name. See this Railroad Board webpage.

In the HSA interview in TurboTax, you are asked if you had Medicare at any point of the year. You should have answered YES and then on the following screen indicate which months you had Medicare.

This would have disallowed counting each Medicare month in terms of calculating your annual HSA contribution limit. That is, TurboTax would not have allowed you the HSA contribution based on that month. If you were on Medicare the entire year, then you would not have been allowed any HSA contributions at all.

Just to clarify, when TurboTax asks you your coverage for a month, you should indicate Self-only or Family only for those months when you have no conflicting coverage (Medicare is conflicting coverage). Don't answer Self-only or Family just because you also have an HDHP policy - if you have conflicting coverage, it's as if you don't have HDHP coverage.

Make sense?

[Ethomaha]

Why doesn’t TurboTax flag the error or conflict when I have railroad 

Medicare and HSA. I have filled out HSA form with family HDHP

by month (incorrectly) and my 1099 shows Medicare deduction and I contribute $8,100 to HSA but Smartcheck says everything is fine. TurboTax let me do HSA wrong.  Why?

[BillM223]

"TurboTax let me do HSA wrong. "

No, TurboTax is dependent on you entering accurate information.

The fact that you had a Medicare deduction on some 1099 would not tell TurboTax enough to know that there was a conflict. A deduction does not show that you are on Medicare. And even if it did, TurboTax would have no way to know if it was for one month or twelve months. Not even looking at your age would tell TurboTax that you were on Medicare, since going on Medicare is not actually required at age 65.