Tax Software HSA Max Allowed

C

CDRE

Recycles dryer sheets
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May 8, 2016
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I notified H&R Block about an error and was hoping it would be fixed in their Update released today. It is not fixed. All they said was we'll report it up two levels and take a look. I wonder if Turbo Tax has the same issue. Or perhaps my understanding of the 2020 MFJ maximum contribution is not correct.



Here's the issue: I believe that the 2020 MFJ HSA maximum for two persons that are both 55+ and under a HSA Qualified single Family insurance Plan and each has their own HSA account is $9,100 and simply derived from $7,100max + $1000 catchup + $1,000 catchup. However, the software currently derives the maximum as $8,100 without penalty. I'm guessing it does not recognize that each person has their own HSA account.


Is my thinking correct? Does TT compute it correctly?
 
jebmke said:
Did you do a form 8889 for each of you?
Click to expand...
Yes, the H&R Block software has this form for each person but indicates there will be a penalty for going $1,000 over ($8,100). Here's the view:


H&RBlockHSAScreenshot.jpg
 
Yes, TurboTax desktop software computes this correctly. It asks about contributions and health coverage for each individual. I answer the contribution questions as $4550 and $4550 and say that each of us was covered by a family high deductible plan for the entire year. Both 8889s look correct, but they still say "Do Not File" in red, so either the IRS hasn't released the final form yet or Intuit is still verifying their implementation of it.
 
I thought $8100 was the max family contribution, no matter how many HSA's you have.
 
Dave J said:
I thought $8100 was the max family contribution, no matter how many HSA's you have.
Click to expand...
$7,100 for family + $1,000 for each qualifying catch-up so theoretical max is $9,100.
 
We contributed the family max + $1000 + $1000 into individual accounts for a few years and TT was always fine with it. I was on Medicare in 2020, so just one contribution this time.
 
Dave J said:
I thought $8100 was the max family contribution, no matter how many HSA's you have.
Click to expand...

jebmke said:
$7,100 for family + $1,000 for each qualifying catch-up so theoretical max is $9,100.
Click to expand...

Yes... so you could contribute $8,100 to taxpayer's HSA and $1,000 to spouse's HSA or $1,000 to taxpayer's HSA and $8,100 to spouse's HSA or anything in-between.
 
I think you should check your inputs more closely.


Mine (pre-Jan20 version) allows $9,100.
 
sengsational said:
I think you should check your inputs more closely.


Mine (pre-Jan20 version) allows $9,100.
Click to expand...

Mine does also. I have the latest version installed. We have separate HSA's and therefore separate 1095-A's from our HSA provider. Perhaps that is the difference?
 
Thank you both for verifying the software allows the correct amount. That prompted me to review the inputs. They are correct. It seems something is hung in the software background. (?) I've tried to clear the issue by deleting the 8889's, deleting the 1040, selecting "No" for contributions and then trying inputs again. None of these cleared the issue so I reinstalled the software. Still not resolved. Unless anyone has a suggestion, my next step is to delete the entire return and start from scratch. I already tried to call H&R Block but decided to not wait 30 minutes listening to their trivia on taxes.
 
Last edited:
H&R Block had the same issue/error last year, which I also reported to them in early January.

I got tired of waiting for them to include the fix in a subsequent update, so filed in late February, manually overriding the error in the respective forms.

Not sure if they fixed it in March as I had already filed.
 
Thanks. Its nice to know I'm not alone.:facepalm: I'll probably have to delete the Return and start a new file from scratch.
 
I deleted the Return and started a new file. Same issue. WTF! I then uninstalled the software and deleted the files. Reinstalled from the original download, updated it to the Jan 4th revision, started a new Return (still importing from last years data) and finally achieved success with the HSA total of $9,100 and no penalty/overage. Success achieved. Whew!
 
I didn't read closely, but do I understand that the January 20 update breaks it?
 
sengsational said:
I didn't read closely, but do I understand that the January 20 update breaks it?
Click to expand...
No it does not. My previous post for the Update should have stated Jan 20 in lieu of Jan 4. Regardless, it seems that something gets hung in the background and just won't clear, or, at least I didn't stumble across the methodology to clear the issue without completely starting from scratch. Maybe I just needed the correct phase of the moon and position of my tongue pointing the way.:LOL:
 
I just ran across this exact problem with the HRB software.
The next update is in a week or so - hopefully that will fix it.
 
A few years ago, my insurance agent told me that only the owner of the HSA insurance policy qualifies for the $1000 catch up amount. So, if a couple has one HSA policy covering both of them then only the policy holder qualifies for the $1000 and the covered spouse does not. However, if the husband and wife each have separate HSA policies then each of them qualifies for the $1000 catch up amount. For that reason, DH and I each have our own HSA policy even though they are identical policies.

I wonder if family versus individual policies is what is creating the issue people are seeing.
 
Splash said:
A few years ago, my insurance agent told me that only the owner of the HSA insurance policy qualifies for the $1000 catch up amount. So, if a couple has one HSA policy covering both of them then only the policy holder qualifies for the $1000 and the covered spouse does not. However, if the husband and wife each have separate HSA policies then each of them qualifies for the $1000 catch up amount. For that reason, DH and I each have our own HSA policy even though they are identical policies.

I wonder if family versus individual policies is what is creating the issue people are seeing.
Click to expand...

If you have a family high deductible policy, then each adult over the age of 55 can contribute an extra $1000 to his or her individual HSA account. You don't need to have separate policies, just separate HSA accounts. The instructions for form 8889 are very clear about this, and the tax software has always supported it. It seems like H&R Block might be having a recurring bug in this area for this year.
 
I had the same issue with H&R Block software. I was able to override it by opening up the form.
 
I did the update today - and I think the wording changed - so Input in 3,550 for self on the first screen, stepped through the questions and also did 3,550 for spouse.

When I was all done I restarted the interview and changed the amount to 4,550 for both self and spouse.

The pdf of the form looks correct.

YMMV
 
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