HSA opening

[eridanus]

I've been told by an HSA company rep that I had to have my HSA established by 12/31 in order to make 2005 contributions. Anyone know if this is true? I'm now looking through the IRS docs.

 

[REWahoo]

Have you tried looking through the FAQ's here? www.hsainsider.com

 

[eridanus]

Have you tried looking through the FAQ's here? www.hsainsider.com

No, I haven't. Thanks. A blurb on hsabank.com indicates that an account can be opened until tax deadline.

http://www.hsabank.com/agents/newsletters/agent_update_03.04.05.htm

 

[starry night]

Yes, I do believe you would have to have established the HSA by 12-31-05, but then contributions can be made for '05 tax year until 4/17/06.

In addition, you can only contribute pro-rata for the number of months during '05 that you were enrolled in your High Ded Health Plan, so that, for example, if you began your HDHP eff. 7-1-05, you can only contribute 1/2 (6 out of 12 months) of the allowed maximum plan contribution.

 

[eridanus]

Yes, I do believe you would have to have established the HSA by 12-31-05, but then contributions can be made for '05 tax year until 4/17/06.

I'm getting differing opinions from a number of sources. I'm currently on hold with the IRS' "Complex Issues" office. I couldn't find anything in the IRS docs (969) about when the accounts had to be established.

 

[TromboneAl]

My understanding:

1. You have to have the HSA Compatible health insurance plan in place in the year for which the contributions will be made.  Contributions can only be made for the number of full  months that it is in force.

2. You have until tax time to open/fund the HSA account.  I funded mine in January 2006 for 2005.

So, for example, you could get onto your plan by Dec 1, 2005 and contribute $220.83 on April 14, 2006.

 

[eridanus]

My understanding:

1. You have to have the HSA Compatible health insurance plan in place in the year for which the contributions will be made. Contributions can only be made for the number of full months that it is in force.

2. You have until tax time to fund the HSA account. I funded mine in January 2006 for 2005.

So, get your plan in place at least by Dec 1, 2005 and set up your account by April 14, 2006.

Right. I've had an HDHP since mid-2004. Eligibility isn't a problem.

I just talked to Mr. Moss, 7515911, at the IRS and he informed me that an account could be set up until tax filing deadline, and of course 2005 contributions could be made until then as well.

While that's not an authoritative opinion, it's the best I have, and doesn't contradict anything in Pub 969. It also agrees with what I want to do.

 

[MileKing]

My understanding:

1. You have to have the HSA Compatible health insurance plan in place in the year for which the contributions will be made.  Contributions can only be made for the number of full  months that it is in force.

I don't believe this is entirely correct. I think contributions can be made only for those months where you are in the high-deductible health insurance plan on the 1st of the month. Full month is not required and if you enroll in the insurance plan after the 1st of the month, you basically lose the ability to contribute for that month.