2020 HSA Contribution Limits

[rkser]

I am 64, DW is 59, filing Married Filing Jointly

To HSA in yr 2020 each of us can contribute up to $4550 ($3550 + $1000 Catch Up contribution) .i.e up to total of $ 9100

We have a Family HSA medical Insurance this year, I am told both of us together can contribute up to $7100.

I wonder why that is ?
Why the HSA Limit is $ 2000 less for a married couple ?

Any thoughts ......, thanks

 

[cathy63]

There's actually no difference. A married couple covered by a family HSA eligible plan can contribute $7100 divided however they like between their two HSAs. In addition, each member of the married couple who is over 55 can also contribute $1000 to their own HSA. Since you're both over 55, you can contribute a total of $9100, but at least $1000 has to be in each person's own HSA. You can divide your contributions up as $1000/$8100 or $4550/$4550 or any other way as long as there's at least $1000 into each person's account.

 

[rkser]

Although we have a family HSA plan, we can contribute $4550 into each of our HSAs as we both are above 55 ?

Is the $7100 mentioned a combined $3550 for each HSA of a couple < 55 yrs ?, it sure can confuse.

 

[bbqcoder]

Is the $7100 mentioned a combined $3550 for each HSA of a couple < 55 yrs ?, it sure can confuse.

Yes. It seems pretty clear to me looking at this
https://www.shrm.org/resourcesandto...s/pages/irs-2021-hsa-contribution-limits.aspx

 

[RunningBum]

I've started a TurboTax run and it's telling me that my $4550 contribution is in excess by $50. I'm 59. I'm seeing everywhere that $3550+$1000 is correct. Using TT Deluxe desktop version, and yes, it's the 2020 edition.

 

[audreyh1]

For a couple both over 55 yet not turning 65 in 2021, they can combined contribute a max of $9200 to their HSAs. At most, $8200 can be contributed to one HSA account, and the second catch up contribution of $1000 has be contributed to the other spouse's HSA account.

For a family HSA compatible health insurance policy, the non-catch-up contributions ($7200) can be contributed to either account.

It may be that for a couple using two individual HSA compatible health insurance policies, $4600 should be contributed to each of two HSA accounts, but when filling out the tax forms it seems that what matters is the combined total.

 

[audreyh1]

I've started a TurboTax run and it's telling me that my $4550 contribution is in excess by $50. I'm 59. I'm seeing everywhere that $3550+$1000 is correct. Using TT Deluxe desktop version, and yes, it's the 2020 edition.

Fidelity shows $4550 as the 2020 individual HSA limit for me (over 55), so TT is in error.

 

[RunningBum]

Fidelity shows $4550 as the 2020 individual HSA limit for me (over 55), so TT is in error.

I agree. I just stopped and restarted it to see if it'd pick up a fix for that and it hasn't. I searched TT help and they have a question
Why am I showing an excess HSA contribution in 2020?

but the answer just assumes you over contributed. They even quote the 3550/7100 base amount. Frustrating, but I'm not going to take my income anywhere close to $50 from the ACA cliff so I'm not sweating it.

 

[audreyh1]

Can you report the bug?

I usually find discussions of bugs online. But it may be early for online discussions of 2020 TT bugs.

 

[RunningBum]

Can you report the bug?

I usually find discussions of bugs online. But it may be early for online discussions of 2020 TT bugs.

I went to https://support.turbotax.intuit.com/contact/ and put in the details. After filling it in TT said to call their support line and gave me an ID for the issue I submitted. 6 minute wait. I'm not going to go through a phone call for this. Hopefully someone still reads my submission. I also made a comment on the question/answer I previously referred to.

 

[cathy63]

I've started a TurboTax run and it's telling me that my $4550 contribution is in excess by $50. I'm 59. I'm seeing everywhere that $3550+$1000 is correct. Using TT Deluxe desktop version, and yes, it's the 2020 edition.

The IRS has not yet released form 8889 for 2020, and you won't see it in TTax until that happens, so I assume they're using the 2019 form for now. The current form is here: https://www.irs.gov/pub/irs-pdf/f8889.pdf When you can see the 2020 form at that link, then it'll show up on TTax about a week later.

You can confirm that TTax has the 2019 version by going to forms mode (Ctrl+2 or Cmd+2) and opening form 8889. The year is in the upper right corner. The limits are on line 3. If the program automatically entered $3500 on line 3, you may be able to override it by pressing Ctrl+D and typing in $3550. Some fields can't be overridden, I don't know about this one.

 

[walkinwood]

I've started a TurboTax run and it's telling me that my $4550 contribution is in excess by $50. I'm 59. I'm seeing everywhere that $3550+$1000 is correct. Using TT Deluxe desktop version, and yes, it's the 2020 edition.

I encountered that too - I'll just wait till they fix it and I'm sure they will without my input


You can't enter stock sales either since they say the IRS hasn't finalized the forms.

 

[RunningBum]

The IRS has not yet released form 8889 for 2020, and you won't see it in TTax until that happens, so I assume they're using the 2019 form for now. The current form is here: https://www.irs.gov/pub/irs-pdf/f8889.pdf When you can see the 2020 form at that link, then it'll show up on TTax about a week later.

You can confirm that TTax has the 2019 version by going to forms mode (Ctrl+2 or Cmd+2) and opening form 8889. The year is in the upper right corner. The limits are on line 3. If the program automatically entered $3500 on line 3, you may be able to override it by pressing Ctrl+D and typing in $3550. Some fields can't be overridden, I don't know about this one.

The form says 2020. I can't override line 3 or anywhere else the 2019 amount limits what it lets me put in.

When I tried to go into investment sales, TT told me the IRS hadn't released schedule D yet, and told me to return later. I'm surprised they didn't treat 8889 the same way.

 

[RunningBum]

TT has updated for 8889 and now shows $3550 as the individual HSA contribution limit, $4550 if eligible for the $1000 additional catch-up.

Obviously my issue form was accepted, or else they got wind of how displeased I was, and jumped on it right away and fixed it.