Switched jobs - both have HDHP's. How much HSA?

[gindie]

Wife switched jobs in July. The only month in 2015 we will not be under an HDHP is this month of August (we become covered on August 20, but you have to be covered on the 1st for it to count).

Therefore, I understand that she can contribute 11/12 of the maximum HSA contribution. Has anybody done this before and is this correct?

[bingybear]

done this before....no

but from here

Quote:

Testing Period Overview. The testing period is a concept created by Congress to prevent you from receiving greater tax benefits than the government intended in two limited circumstances: (1) you become eligible for an HSA mid-year and remain eligible on December 1 (assuming a calendar tax year), and (2) you move money from an IRA to an HSA. In these cases, the rule requires that you maintain your HSA eligibility for a testing period. Individuals that fail to maintain their HSA eligibility during the testing period face taxes and a 10% penalty on the amount over contributed. The rules are different for regular contributions and IRA funding direct transfers. See page 2 for additional detail.

Quote:

Additional Background for Regular Contributions. The HSA rules allow you to contribute the full federal HSA contribution limit even if you are only eligible for an HSA starting as late as December 1 of the year (this is for calendar year taxpayers – use the first day of the last month of the tax year if not a calendar year taxpayer). This is beneficial for individuals starting HSA eligibility mid-year. The pre-2007, “sum of the months,” rule stated that individuals could only contribute 1/12 times the number of months eligible for the HSA times the applicable federal HSA limit (a pro-rata amount). The current law; however, has a catch. In order to get the benefit of the full federal HSA limit, you need to meet a testing period. If you fail to meet the testing period, the pre-2007 sum of the months rule becomes a factor. If you fail the test, you will owe taxes plus a 10% penalty on the amount over contributed – see paragraphs 5 - 7 below. For additional guidance and examples, please refer to IRS Notice 2008-52. See also our HSA Eligibility and Contribution Worksheet.

The testing period could allow for the whole year.

[Animorph]

I started an HDHP on October 1 2014. Since I was covered on Dec 1 and I'm maintaining coverage through 2015 (the testing period is something like that long, I don't see it in the quotes above), I was eligible to contribute, and did contribute, the maximum for 2014. Went into Turbo Tax just fine. Can't know 100% until my 3 years is up with the IRS I guess, but the rules seemed clear enough.

[MBSC]

You can contribute the full amount for 2015 if you have an HSA eligible HDHP on 12/1/2015 and keep it through the 12 month testing period.

Quote:

A. Less Than Full Year Eligibility –Eligible on December 1. If you become eligible for an HSA sometime during the year, rather than on January 1, you can still contribute and deduct the full amount of the Federal Limit above if you remained eligible on December 1 of that year....However, if you fail to maintain your eligibility for a testing period then the amount you contributed under this rule is subject to taxation and a 10% penalty (except in the case of disability or death). The testing period is the period beginning in the last month of the taxable year (generally December 1) and ending on the last day of the 12th month following such month (generally December 31 of the next year).

The monthly calculation used by the OP only applies if you do not have an HSA eligible HDHP on December 1st or know you will not be able to complete the testing period during 2016.

Quote:

2. Sum of The Months Calculation. Use this chart if you were not eligible for an HSA for the entire year and were not eligible on December 1 of the year.

Source: https://www.hsaresources.com/pdf/HSA..._Worksheet.pdf