BUG in HSA entry for spouse (3rd year in a row) FIX THIS!

[ftcnative]

Situation: MFJ + 2 kids. Have Family HighDeductibleHealthPlan thru My employer + HSA funded from employer (on W2). TurboTax thinks my Wife doesn't have continuous health coverage. "Self" is me not my real name as shown in program, "Wife" likewise. 

To reproduce: Enter W-2 for "Self" having HSA entry (line 12 Code W). Then:

FED TAX tab, Wages & Income bubbletab, Less Common Income group, "1099-SA, HSA ..." line "Start/Update"

Tell us about health accounts -> Check box of only HSA "Self" column.  Continue

HSA to pay for anything in 2022? NO   then Continue  then inherit? NO

Self contributions (only box 12 of W-2) "$0" additional. Continue

Employer tell about other? NO Continue

Medicare in 2022? NO

Was "Self" covered by HDHP in 2022?   Yes during at least 1 month(radio)  and type is Family plan every month(radio) Continue

Overfund in 2021? NO

Summary - Continue

======= THANKS FOR READING THIS FAR ====== We're now at the BUG ==== 

"What type of HDHP did 'Wife' have on Dec 1 2021?   Family (radio) Continue

"Did 'Wife' HDHP coverage lapse in 2022 due to disability?  <<<<<<< WTF <<<< Never said it lapsed!!!!!!

only 2 choices (radio) are: Yes, the coverage ended due to disability OR No, the coverage ended for other reasons.   <<<<< IT NEVER ENDED!!!!! There is NO correct answer as the program thinks coverage ended????

HELP!!

[WadeEH]

I'm having the exact same problem, but it doesn't appear that anyone in answering the question.

[WadeEH]

Try going to this question and looking at the fifth reply. It appears to be a problem with Turbo Tax that has been around for several years, but they don't seem to want to fix it.

Turbo Tax thinks I had a break in HDHP health plan coverage during 2019, but I didn't. Where do I go...

[BillM223]

Your issue is with the question that asks "What type of High Deductible Health Plan did [name] have on December 1, 2021?"

​​​​​​​Unfortunately, the question does not clarify that it is only for a small group of taxpayers and that all other taxpayers should answer "NONE".

NOTE: each spouse can have an HSA. The use of "you" below refers to whichever spouse's name was in the question above.

This question is trying to determine if you utilized the "last-month" rule in 2021 (yes, 2021). The last-month rule lets you use the full annual HSA contribution limit if you had HDHP coverage on December 1, even if you were not covered by an HDHP for all of the year.

However, the catch is that if you used the last-month rule, the IRS requires that you stay under HDHP coverage for all of the following year (2022).

***NOTE*** This question occurs on the taxpayer who does not have an HSA, so never had a chance to tell TurboTax in the HSA interview what their HDHP coverage was for 2022.

So, the fix is this: go back to the question (at the end of the HSA interview), and:

• If you had HDHP coverage for all of 2021, then enter NONE 
• If you had no HDHP coverage for all of 2021, then enter NONE.
• If you did not have an HSA in 2021, then enter NONE.
• If you had an HSA in 2021 but did not contribute to it in 2021, then enter NONE.

Only taxpayers who had their own HSA in 2021 AND who contributed to their own HSA in 2021 should answer “Family” or “Self” or “None” (which can be the right answer in some cases).