HSA, divorce, dependents and contributions

[tulak]

I'm trying to make sure that my HSA strategy is allowed by the IRS.

For 2019, I'll be filing single, with no dependents. My ex-wife will claim both of our children as dependents. Both are >18 for 2019. My ex-wife does not have an HDHP plan, so no HSA contributions.

I'm responsible for medical coverage for both of our children and I have a HDHP/HSA.

Since both of my children are on my medical plan, I'm planning on contributing to the HSA up to the family limit and I'll use my HSA to pay for medical expenses for both children. My ex-wife will also need to contribute for some expenses, which will come out of her HSA (from prior years).

I've looked at Pub. 969 and it says:

Qualified medical expenses are those incurred by the following persons.

Any person you could have claimed as a dependent on your return except that:

• The person filed a joint return,
• The person had gross income of $4,150 or more, or
• You, or your spouse if filing jointly, could be claimed as a dependent on someone else’s 2018 return.

For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child’s exemption.

None of the bullet point items are true in my case, so my interpretation of this is that yes, I can contribute up to the HSA family limit as long as my children are still claimed as dependent by my ex-wife.

Does that sound right?

 

[ProspectiveBum]

Yes, if you have family coverage (vs single), you can contribute the family max, and be reimbursed for any qualified medical expenses that your kids incur.