I turned 65 this month (April) I have made $500 a monthly contributions under the HSA family plan all along. I did not realize that I needed to stop contributions 6 months prior to Medicare kicking in. My wife is 60 and still eligible for an HSA account. I already filed our 2020 taxes. Do I need to remove $3,000 ($1,500 paid in 2020, $1,500 paid in 2021) from the account by revising? Do I need to amend my taxes for 2020?
First, each HSA is owned by one person, there are no joint accounts.
Second, the contribution limit is an annual maximum, it doesn't matter when it is paid, just the total amount. (If you became ineligible on April 1, 2020, then your maximum is $2050. It doesn't matter when it was contributed. You could even contribute the entire amount after your 65th birthday, as long as you don't go over the annual limit.)
You are eligible to contribute to an HSA until the month you are covered by Medicare, not 6 months before. For people who delay starting Medicare, it is effective retroactive by 6 months, but if you join Medicare when you turn 65 and are first eligible, your coverage date is usually the 1st day of the month you turned 65. Your coverage date is printed on your Medicare card.
If you turned 65 on April 2021 (you said "this year"), then you were fully eligible for 2020. If you were covered by a family plan, your eligibility was $8100 ($7100 plus $1000 catch-up provision). If your wife is covered by a family plan and does not have disqualifying coverage, she can also contribute $8100 ($7100 plus $1000 catch-up provision). However, your overall combined maximum is $9100 ($7100 plus the 2 catch-up amounts).
For 2021, your eligibility is $2050 ($8200 x 3/12). Your wife's maximum is $8200, and your overall combined maximum is $8450 (your wife's $8200 plus 3/12 of your $1000 catch-up).
If you turned 65 in 2021, you have nothing to amend, unless you want to make an additional contribution to get your wife's account up to the annual maximum to get the tax deduction. You would then amend to report the additional contribution and claim the tax deduction. You must tell the HSA bank before you make the transfer that this is a 2020 contribution, not a 2021 contribution. The deadline to do this is May 17.
If you meant in your question that you joined Medicare in April 2020, then the concept is the same, the number is slightly different. Your eligibility would be $2025 and your wife's eligibility would be $8100, and your combined maximum would be $8350. You would need to remove any excess contribution from your account (excess over $2025) before May 17. However, you can make a tax deductible contribution to an account in your wife's name up to your combined annual maximum.
In Turbotax, you have to report that you had disqualifying coverage starting April 1 (you are asked to check boxes for the months when you and your spouse had a qualifying HDHP. You have to check "No" for any month when you were disqualified by Medicare. The question should be understood as "check the box if you had a qualifying HDHP and nothing else". If you check that you were not eligible, Turbotax will calculate the contribution limits, and will advise you to remove the excess or pay a penalty. You could also take that excess and re-deposit it into an account in your wife's name as a 2020 contribution and take the deduction (if you are not over the overall limit).
Yes, you may have indicated the HSA contributions were for yourself and not your wife. A Form 8889 is completed for each spouse as noted from the instructions for Form 8889..
- Complete a separate Form 8889 for each spouse. Combine the amounts on line 13 of both Forms 8889 and enter this amount on Schedule 1 (Form 1040), line 12. Be sure to attach both Forms 8889 to your paper tax return.
Enrolled in Medicare. Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. This rule applies to periods of retroactive Medicare coverage. So, if you delayed applying for Medicare and later your enrollment is backdated, any contributions to your HSA made during the period of retroactive coverage are considered excess. (From IRS Publication 969)
To amend your return in TurboTax use the links below.
- How to amend (change or correct) a return already filed (and accepted at the IRS)
- Review the information here to be sure you need to amend your return.
- Steps to amend my 2020 return
You must remove any amounts in excess before May 17th.