Prorating HSA contribution & catchup

[spncity]

So - if you have health ins. that allows HSA contributions - but you only have that insurance for 9 out of 12 months, it's my understanding that you have to pro-rate the contribution.

But - do you have to pro-rate the catch-up amount?

And can this/these pro-rated amounts be sent in April when tax returns are filed?

 

[mn54]

I am in the same situation. It is my understanding that both the contributions and catch-up are pro-rated. I think they have to be sent in by the end of the year. DW will have a seperate HSA that she can contribute to for the full year.

 

[MichaelB]

So - if you have health ins. that allows HSA contributions - but you only have that insurance for 9 out of 12 months, it's my understanding that you have to pro-rate the contribution.

But - do you have to pro-rate the catch-up amount?

And can this/these pro-rated amounts be sent in April when tax returns are filed?

Yes, both are pro-rated. You can contribute up until filing deadline, which for most of us is April 15 next year.

 

[Helen]

There is a weird last month rule that I benefitted from when I was on a high deductible plan which I started in December of 2014 (I learned about the rule from posters on this forum - thank you!):


Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers)

https://www.irs.gov/publications/p969

 

[spncity]

There is a weird last month rule that I benefitted from when I was on a high deductible plan which I started in December of 2014 (I learned about the rule from posters on this forum - thank you!):

Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers)

https://www.irs.gov/publications/p969

Yes, I read about that. I believe you also have to be in an HDHP as of Dec. of the following year for it to be valid. Others may wish to comment if I'm mistaken or if I haven't phrased this clearly. I think there is a 12-month testing period. Best to read the helpful info in the link.

 

[LRDave]

Sorry - a couple of dumb questions:

1) DS and I were covered by an employer-sponsored HDHP plan through July 31st this year and I am eligible for the catch-up. So I interpret what my HSA contribution can be this year as: ($7000 + $1000) * (7/12) = $4,666.67. Is this correct?

2) I will need contribute my own after tax savings to get the to the total above, as my payroll deductions ended on my last day of w*rk - 4/30/2019. Doe the amount I contribute come off my AGI on my 2019 taxes?

 

[MichaelB]

Yes, I read about that. I believe you also have to be in an HDHP as of Dec. of the following year for it to be valid. Others may wish to comment if I'm mistaken or if I haven't phrased this clearly. I think there is a 12-month testing period. Best to read the helpful info in the link.

That’s my understanding as well.

DS and I were covered by an employer-sponsored HDHP plan through July 31st this year and I am eligible for the catch-up. So I interpret what my HSA contribution can be this year as: ($7000 + $1000) * (7/12) = $4,666.67. Is this correct?

Yup, as long as the plan is HSA eligible.

2) I will need contribute my own after tax savings to get the to the total above, as my payroll deductions ended on my last day of w*rk - 4/30/2019. Doe the amount I contribute come off my AGI on my 2019 taxes?

Yes, it’s an adjustment to income, much like an IRA contribution.