I am confused by the question I am getting in the HSA section. TurboTax is asking me questions about my High Deductible Health plan.
First, it asks: What type of High Deductible Health Plan did Lindsey have on December 1, 2022? The answer to this is Family.
Then it asks a question I don't understand. It asks: "Did <wife's name> High Deductible Health Plan coverage lapse in 2023 due to disability? We see that <wife's name> had a break in HDHP health plan coverage during 2023. Let us know if this was the results of a disability." Then it offers the answer of choices of:
I don't understand why we are getting this question. Lindsey's coverage did not lapse at all in 2023. Our 1095-C has 1a in all the boxes for each month.
What did I click or input wrong that it thinks this is the case? How do I fix? Does it matter? It doesn't seem to impact my taxes at all. I did by hand and got the same return that TurboTax is suggesting I am due.
Just before you see the message stating that your spouse had a lapse in coverage, you should see the question, “What type of High Deductible Health Plan did [spouse] have on December 1, 2019?”. The choices are Family, Self only, or None.
If your spouse had been covered under your family plan, you might think you should answer Family to the question. However, the answer should be None.
It is referring to what type of plan your spouse held in their name on December 1. If your spouse had their own separate HDHP on that date, then choose the type of plan that they had. If instead your spouse was covered under the plan in your name, then you should choose None.
You can return to the beginning of the questionnaire to change your answer.
Just before you see the message stating that your spouse had a lapse in coverage, you should see the question, “What type of High Deductible Health Plan did [spouse] have on December 1, 2019?”. The choices are Family, Self only, or None.
If your spouse had been covered under your family plan, you might think you should answer Family to the question. However, the answer should be None.
It is referring to what type of plan your spouse held in their name on December 1. If your spouse had their own separate HDHP on that date, then choose the type of plan that they had. If instead your spouse was covered under the plan in your name, then you should choose None.
You can return to the beginning of the questionnaire to change your answer.
I went back and changed the answer for the spouse to none, but it didn't affect the tax owed amount at all.
What else could I be doing wrong?
Please clarify. What result were you expecting?
Changing the answer to the question as to what type of High Deductible Health Insurance your spouse had on December 1 to "none" will resolve the issue of TurboTax telling you that your spouse had a lapse in coverage when your spouse was covered under your plan. It won't necessarily change your income, depending on other factors in your situation.
My spouse had their own HDHP plan for 2023, but when I select “self only”,Turbo Tax is still asking about a break in coverage. Why is that if there was no break in coverage as my spouse had their own HDHP?
Turbo Tax asks “Did ‘spouse’s HDHP coverage lapse in 2023 due to disability? Since I had responded to the prior question that my spouse had their own HDHP in 2023, why am I asked the next question?
To clarify, are you entering a 1099-SA?
If you are entering under
Wages & Income
Less Common Income
1099-SA, HSA, MSA
The first screen states "Tell us about the health-related accounts you had in the tax year"
You would select Health Savings Account (HSA) for your spouse
Next screen asks "Did you use your Health Savings Account (HSA) to pay for anything in the tax year"
You would select "Yes"
On the next screen you would enter the details from your 10990-SA, HOWEVER PLEASE BE AWARE that the program starts with a 1099-SA for the taxpayer listed first on the 1040.
If that person did not get a 1099-SA, be sure to select the spouse on the screen.
Later in the interview the program asks "What type of High Deductible Health Plan did "The First taxpayer listed on the 1040" have on December 1, of the prior year?" AGAIN, the program starts with the first taxpayer listed on the 1040. If this person did not have a High Deductible Health Plan (HDHP), select NONE.
Please go back to that section and review your answers to the interview questions.
If only one person had a HDHP, you need to be careful that the program does not also ask about the other person.
If this error is showing another way, please continue your question and please provide more information if possible.
I was confused by the same "coverage lapse" of spouse response, stemming from the same badly formulated "spouse coverage" question.
Googling I found same confusion come up from multiple people TT customers dating back a few years.
At what point does it occur to TT that they should reformulate the questionnaire to avoid this.
Unless this is some job security scheme to keep "experts" employed? if not, kindly, reformulate the question.
My spouse had me under his HDHP in Dec 2022 and all of 2023. I presume that this means he has a "Family" plan.
I also had my own HDHP in Dec 2022 thru mid-July of 2023. My HDHP coverage ended in mid-July due to work termination due to a disability that started the prior July (i.e., my work let me keep my HDHP for one year from the start of my disability...July 2022 to July 2023).
Neither of us has had an HSA or MSA in 2023.
For myself, I selected "Self only" for the Type of HDHP plan I had on Dec 1, 2022. I replied "Yes" to the question that my HDHP coverage lapsed due to a disability. Based on the existing answers in this thread, I think that is correct answer, even though I was still covered for the rest of 2023 under my spouse's HDHP.
For my spouse, I selected "Family" for the Type of HDHP plan he had on Dec 1, 2022. However, I still get the question as to why his HDHP coverage lapsed??? His HDHP coverage never lapsed. What should I do?
Thanks,
Tom
If neither of you have an HSA, what questions are you answering?
Those questions would only be asked if you contributed to an HSA.
Under "Tell us about the health-related accounts you had in 2023," I answered "None" for both my spouse and myself. This then leads to the Q&A I went through above.
That is asked in the 1099-SA entry section
Income
Less Common Income
1099-SA, HSA, MSA
Do you have a 1099-SA? Did you have an HSA in 2022?
If neither of you had an HSA you should be able to skip all of the HSA questions and ignore them completely.
I went through the HSA questions because TT said that are needed to be updated. Now that I have answered the HSA questions as best I could, with some answers being wrong, do I need to clear those selections somehow? I don't want to report erroneous info to the IRS or mess up TT based upon those answers. I cannot see how to clear those selections. First screen "Tell us about the health-related accounts you had in 2023" answers I select (which is "None of the above" for both me and my spouse) do not get saved when I go back into the question. When I answer "None of the above," TT still asks all of the HSA questions that I cannot answer truthfully due to the limited answer choices.
No, it doesn't matter. You don't have any deductible contributions to an HSA to report and you don't have any withdrawals from an HSA to report. So nothing about an HSA is getting reported to the IRS. Leave those questions the way they are and move on.
Both in 2022 and 2023, my wife and I both had an HDHP, each covering ourselves only. I had an HSA, my wife had not. I had a distribution, reported to me on a 1099-SA.
First question in TT: "Tell us about the health related accounts" with options HSA, MSA, Medicare Advantage MSA, and None. I chose HSA for myself, and None for my wife. Again: she had an HDHP, but without HSA.
On the question "Was (my name) covered by a HDHP in 2023", I filled out, "Yes" and "Self only".
On the question "What type of HDHP did (wife's name) have on December 1, 2022)", I filled out "Self only".
That results in the dreaded "Did (wife's name) HDHP coverage lapse in 2023 due to disability, with possible answers "yes, coverage ended due to disability" and "no, the coverage ended for other reasons".
Her coverage did not lapse: both of us had our own self-only HDHP in both 2022 and 2023. I don't think I answered any relevant question incorrectly, but still, TT thinks somehow her coverage ended in 2023. What's the best way to get past this issue?
Just before you see the message stating that your spouse had a lapse in coverage, you should see the question, “What type of High Deductible Health Plan did [spouse] have on December 1, 2022?”. The choices are Family, Self only, or None.
If your spouse had been covered under your family plan, you might think you should answer Family to the question. However, the answer should be None.
It is referring to what type of plan your spouse held in their name on December 1, 2022. If your spouse had their own separate HDHP on that date, then choose the type of plan that they had. If instead your spouse was covered under the plan in your name, then you should choose None.
To go back to the section of your return to answer the questions again, use the following steps:
As I explicitly stated: my wife had her own HDHP, covering only herself. I did select "Self only" on the question about her plan prior to getting the message that her coverage had lapsed.
To clarify, is this when you entered a 1099-SA?
If you exit that section and go back to it,
Personal Income or Wages and Income (depending on the program)
Less Common Income
1099-SA, HSA, MSA START or UPDATE
On the first screen, is anything shown on the "Your HSA summary" for your spouse?
On the next screen, is the HSA box checked for your spouse?
Are you listed first on the return? (the program asks about the reporting taxpayer first, then the spouse even if only one has an HSA)
Yes, this is when entering a 1099-SA
I am listed first on the return.
On the first screen, the column for my spouse has all zeroes (as it should)
On the next screen, I originally did not check the HSA box for my spouse: she has an HDHP, but not an HSA.
That lead to the dreaded incorrect question about the reason for her cancelling her health plan.
Checking the HSA box for my spouse gets around that, but that leads to a form 8889 for her being included (there's an 8889-T for me and an 8889-S for her). Looking over her 8889-S, there seems no harm to including the form (all the numbers are correct).
But this seems a bug in TT: we both have a "self only" HDHP; only I have an HSA; but if I don't check the HSA box for my spouse in the 2nd screen, it leads TT to conclude that her coverage stopped.
I was also confused by this question. It is really infuriating that TurboTax fails to provide adequate guidance, especially because it is due to their extensive lobbying influence that the IRS has not provided its own tax preparation software.
Many of the issues in completing the HSA interview are due to two causes:
1. The opaqueness and obscureness of the IRS rules on the HSA (not to mention that of Congress), and
2. The huge amount of misinformation on the Internet on how HSAs work.
This causes large numbers of of taxpayers to misunderstand the questions that TurboTax poses. For example, "First, it asks: What type of High Deductible Health Plan did Lindsey have on December 1, 2022? The answer to this is Family. "
In many cases, this Lindsey would have had NO HDHP coverage (people read this as "what type of health coverage", but it specifically refers to HDHP coverage). So, in this first case, the answer would be NONE.
However, in other cases, Lindsey might have been covered by spouse's HDHP Family plan. But if Lindsey did not have her own HSA, Lindsey would never have been asked to go through the HSA interview, and therefore never had the chance to indicate Lindsey's own HDHP coverage. Therefore, TurboTax mistaken thinks that Lindsey had HDHP coverage in 2022 (because of the answer of Self or Family to the question), but had no such coverage in 2023 (because of the lack of HSA interview), so thinks that that Lindsey's coverage has "lapsed".
Who cares if it lapsed? TurboTax is trying to determine if Lindsey used the last-month rule in 2022 to increase the annual HSA contribution limit. What is the last-month rule? You see, that's the problem. TurboTax used to ask people what the last-month rule was, but fewer people understood that question than the current set of questions.
Despite @irritatedExpat 's comment, TurboTax is a DYI product - you are supposed to understand something about what you are doing. TurboTax provides some help (primarily through interview screen comments and Learn More links), but TurboTax cannot teach you everything you need to know about particular segments of taxation like HSAs. Indeed, even many tax professionals don't know what the last-month rule is.
TurboTax asks the questions it does for a reason; and if you can't make sense of them, then do what you are doing now - come to the Community and ask what the question means. But please don't assume that TurboTax doesn't know what it's doing.
Remember that TurboTax offers two additional layers of Live help which would get you through this process with reasonable ease.