2020 Form 8889, Line 1

[54581625]

My husband has an HSA that he personally, not through his employer, contributes to. While he does have health insurance, he did not have an HDHP plan in 2020. Additionally, he still does not have an HDHP plan this year.

We are getting stuck on Form 8889 line 1, because apparently it is required to select either "Self-only" or "Family", even though he did/does not have an HDHP plan. I saw this was a question in 2019 and the solution was to just check "Self-only." The response indicated that doing so will not cause problems with filing.

My questions are:

1. Is the suggested solution of selecting "Self-only" still valid for 2020 returns?

2. Will selecting this option, despite not having an HDHP, cause any problems down the road? 

Please let me know. Thanks!

[AnnetteB6]

To answer your questions, choosing 'self-only' without High Deductible Health Plan (HDHP) coverage is not a valid option and was not a valid option for 2019.  It can (and has already) caused problems with regard to the Health Savings Account (HSA).

In order to be eligible to contribute to a HSA, your husband must be covered by a High Deductible Health Plan.  The correct answer for your situation is to choose None for the question about what type of HDHP plan he had for 2020.  

As a result, TurboTax will advise you that the contribution must be removed from the HSA by the due date of the tax return or it will be considered an excess contribution and you will be subject to an additional tax each year until the contribution is removed from the account.

If you entered a similar contribution on your 2019 return without having HDHP coverage for 2019, that contribution is also an excess contribution that must be removed.  You will also need to amend your 2019 return to correct the situation.

Take a look at the following TurboTax article for more information:  What is a health savings account (HSA)?