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My understanding is as long as an HSA is established before the end of this year, I can contribute my maximum 2008 amount. Is this correct?
HSA Tax Question
- Thread starter joshril
- Start date
- 15,319
If both the insurance policy and account are started by 12/31, you're good to go.
Rick
- Staff
- #3
- Thread starter
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Thanks and thanks! That's what I thought...
- Thread starter
- #6
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Good info... So is this stating that the HSA has to been in effect 12/1 and stay in effect for 13 months to get the full deduction?
livebetter
New Member
- 13
In the link provided by samarco, if you look just below the contribution amounts, about 1/4 of the way down the page, you will find,
"*These are annual contribution limits, and would presume the HSA-eligible individual to have coverage for the entire year. These contribution limits would be reduced by 1/12th for each month in the year the individual is not HSA-eligible.".
..which seemed to indicate that you might not be able to take the full deduction.
However, I took the tedious road of reading through IRS Publication 969 to find...
"Last-month rule. Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. You are the treated as having the same HDHP coverage for the entire year as you had on the first day of that last month.
Testing period. If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. For example, if you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule."
If your thirst for HSA information continues, you can visit irs.gov and search for form 969. The above quote is from page 4.
I tried to post the direct link, but I'm too new to this forum to be allowed to post links yet.
"*These are annual contribution limits, and would presume the HSA-eligible individual to have coverage for the entire year. These contribution limits would be reduced by 1/12th for each month in the year the individual is not HSA-eligible.".
..which seemed to indicate that you might not be able to take the full deduction.
However, I took the tedious road of reading through IRS Publication 969 to find...
"Last-month rule. Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. You are the treated as having the same HDHP coverage for the entire year as you had on the first day of that last month.
Testing period. If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. For example, if you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule."
If your thirst for HSA information continues, you can visit irs.gov and search for form 969. The above quote is from page 4.
I tried to post the direct link, but I'm too new to this forum to be allowed to post links yet.
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