Go to the Income and Expenses tab. Scroll down to 1099-SA, HSA, MSA. Go through the interview questions until you get to the questions about having coverage all year.
I’m having this same issue, and I wasn’t asked if I had coverage all year. I have home & business. When I go to that form, I’m asked what kind of hdhp I had. It’s only me, so I choose Self only. The next question asks if my coverage ended for disability or another reason. I’m offered no opportunity to state that I was covered by an hdhp all year, with no gaps in coverage. ??
You do not need to notify the IRS that you had health insurance coverage for the year. There is no longer a penalty for failure to have health insurance.
Thank you, but that's not my point. My point is that TT shouldn't be making this mistake at all. For the sake of accuracy, I would like to fix it. Is there a way I can do this?
Incidentally, this inaccuracy raises the concern about what other data might be inaccurately represented, but that's a separate issue.
Your issue is with the question that asks "What type of High Deductible Health Plan did [name] have on December 1, 2018?"
Unfortunately, the question does not clarify that it it for a small group of taxpayers and that all other taxpayers should answer "NONE".
This question is trying to determine if you utilized the "last-month" rule in 2018. The last-month rule lets you use the full annual HSA contribution limit if you had HDHP coverage on December 1, 2019, even if you were not covered by an HDHP for all of 2019.
Using the "last-month" rule requires that you stay under HDHP coverage for all of the following year (2019)
***NOTE*** This question applies only to taxpayers who had HDHP coverage in 2018 and who made HSA contributions to their own HSA in 2018; otherwise, they could not have benefited from the last-month rule.
So, the fix is this: go back to the question (at the end of the HSA interview), and if you did not contribute to an HSA in 2018 or not even have an HSA in 2018, then answer NONE.
I know that that is not what the questions asks, but believe me, the question does not apply to taxpayers who don't have an HSA, even if they have HDHP coverage.
If you had HDHP coverage for all of 2018 , then enter NONE
If you had no HDHP coverage for all of 2018, then enter NONE.
If you did not have an HSA in 2018, then enter NONE.
If you had an HSA in 2018 but did not contribute to it in 2018, then enter NONE.
Thank you, this makes some sense. I have the same problem but in the context of trying to figure out medical expense deductions. I have a HDHP but no HSA. TT is supposed to make the process easier, but every year there is some issue that needs to be researched and worked around.
So helpful, and makes sense too! You must be an Accountant! It is also true, as the previous user stated that every year Turbotax gets more wonky! Thank you for explaining it and making it easy to understand! The other point here is that just because you have an HDHP you may not chose to have an HSA, you may use an FSA instead or not have either. Needs to be better explained by the Accountants writing the program!
I just encountered the same issue. Going through the interview seems to create rather than solve the issue. When is Turbotax going to fix this problem?
Possibly the issue is with the following question which may be poorly stated: "What type of High Deductible Health Plan did ______ have on December 1, 2019." I am covered by my wife's family plan, so I chose "Family Plan". This triggers Turbo Tax to thin that I had a break in coverage. Possibly I am supposed to choose "None" because it is my wife's plan, not mine. The question is not clear.
When I choose "None", I don't get the "You had a break in coverage" issue, but I wonder what other issues it will cause - I had coverage and this is forcing me to say that I did not have coverage.
Entering "None" for you when your spouse was the one with the HSA, will not cause you a problem.
This answer is used only to determine whether or not you used the last-month rule in 2019, and since you did not even have an HSA in 2019, you could not have used the last-month rule (this has to do with how your annual HSA contribution limit is calculated).
As I noted about halfway up this thread, this question is only intended for taxpayers who had an HSA in 2019 and who made contributions to it. Everyone else should answer "None".
I marked the checkbox under my name for HSA because I'm employed and the account is under my name. My wife is not employed. If I leave her checkboxes blank or if I select 'None of the above' then it still triggers the case of "we see your coverage lapsed during 2020."
What is happening? When I get to my wife's portion of the HDHP questions, I select 'Family' as she was covered by my plan. Turbo Tax then tells me "We see [name] had a break in HDHP health plan coverage during 2020."
That doesn't make sense to me.
Your issue is with the question that asks "What type of High Deductible Health Plan did [name] have on December 1, 2019?"
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 2019 (yes, 2019). 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 (2020).
***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 2020.
So, the fix is this: go back to the question (at the end of the HSA interview), and:
Only taxpayers who had their own HSA in 2019 AND who contributed to their own HSA in 2019 should answer “Family” or “Self” or “None” (which can be the right answer in some cases).
I'm using TurboTax Premium for 2020. Under Deductions and Credits 1099-SA I have the same problem as the first poster: The program asks: "What type of High Deductable Health Plan did you have on December 1st, 2019?"
Your instructions to correct that did not work. If I select "None" I never get a change to show I had coverage all year.
And...
Why does December of 2019 matter for 2020?
Thanks
That may be true for your federal taxes, but in California there is a Mandate and a penalty in you do not comply.
https://www.healthforcalifornia.com/affordable-care-act/minimum-essential-coverage
"If I select "None" I never get a change to show I had coverage all year."
As I noted above, you get a chance to show coverage all year only if you have an HSA. And if you had an HSA in 2020 and showed coverage, then - unless your coverage was not for the full year - you would not even be asked this question.
"Why does December of 2019 matter for 2020?"
I will repeat what I wrote above:
This question is trying to determine if you utilized the "last-month" rule in 2019 (yes, 2019). 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 (2020).
So this question is supposed to ask about 2019. And as I noted above,
So, if you don't have an HSA or HDHP coverage, all this may make no sense to you, but's that's OK, because the question doesn't apply to you. Just answer NONE and move on.
The question "What type of High Deductible Health Plan did you have on December 1st, 2019?" has nothing to do with California requirements.
TurboTax is asking this question to test for a specific situation: where you had and contributed to an HSA in 2019 under the last month rule, but where you did not stay under HDHP coverage for all of the "testing period" which is essentially all of 2020.
Any California requirements would be addressed in the California interview, not in the HSA interview on the federal return.
This is a legitimate question within its narrow scope but which is lacking the context that would show that it does not apply to most taxpayers.
So where it says "Tell us about the health0related accounts you had in 2020", you have to select both yourself and your spouse for Health Savings Account (HSA). That should fix it.
Yeah, this worked for me... I had no HSA this year, but I had to check yes...
Then afterwards you just say you made no contributions...
Makes no sense... most would leave one of the boxes unchecked, but that shouldn't make
TT think you werent't covered by an HDHP that year
Just spoke to an agent and in my case it wasn’t related to either the last month rule or the question about December 1 of the previous year. In my case (married filing jointly) I had to mark (check box) that we both have “health related accounts” though its just one of us who pays for it. In a family plan though one person is paying into HSA, both family members are on the account, so when you’re asked to check all the boxes that apply under both names, for the question “Tell us about the health-related accounts you had in [year]” make sure you check HSA for both members if not it assumes that you didn’t have an account or HDHP and asks why you had a break.
"In my case (married filing jointly) I had to mark (check box) that we both have “health related accounts” though its just one of us who pays for it."
This is not an accurate way to describes how HSAs work.
HSAs belong only to an individual; it does not matter if the couple has Family HDHP coverage, like an IRA, the HSA belongs to only one person.
"In a family plan though one person is paying into HSA, both family members are on the account"
This is true for the HDHP insurance policy, but it is not true for the HSA.
"so when you’re asked to check all the boxes that apply under both names, for the question “Tell us about the health-related accounts you had in [year]” make sure you check HSA for both members ."
This is not correct. Answering this way will cause TurboTax to issue two forms 8889 - one for each taxpayer - when, in fact, only one taxpayer actually has an HSA. This may cause considerable confusion with the IRS down the road. Plus in the HSA interview, you will be answering questions about the spouse's HSA that don't apply because the spouse doesn't have an HSA.
"if not it assumes that you didn’t have an account or HDHP and asks why you had a break"
No, this is not the reason. The problem - as I described above several times - is that most taxpayers should not see this question. It should be presented only to taxpayers who had an HSA in 2019 and who contributed to it. Unfortunately, the question does not clarify this, so many taxpayers answer Family or Self, when they should just answer NONE.
If you do not have an HSA (remember, an HSA belongs only to an individual), then do not check that you have an HSA. And if you did not have an HSA in 2019 (this is for tax year 2020) or did not make any contributions to it, then answer the "What type of High Deductible Health Plan did [your name] have on December 1, 2019?" with NONE.
This is such a confusing situation, I wish that TurboTax would fix their software. I'm hitting the same thing this year, haven't hit in the past. Talked to two different TT reps today, neither of which had a good explanation about what was going on or why. Have deleted my return and restarted twice trying to figure out what's going on.
The community does not know your question. Is it that turbo tax doesn't think you had health insurance all year?
Correct. TurboTax still thinks that I haven't had health insurance for the entire year. The application seems to believe that I had a break in coverage, regardless of which menu item I select.