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Did I over-contribute to HSA?

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rated:
In March 2016 I married my wife who moved from overseas (non-US citizen/resident at the time) during the same month. I changed my single HSA account to family in mid-March and kept the family plan until mid-July when she got a job with her own HSA. I contributed $4,105 to my HSA and she contributed $2,410 to hers. This would be $6515 which is under the $6,750 annual limit for a family. However, since she wasn't added to my HSA account until mid-March, would I need to remove $844 ($6,750÷12÷2x3) from the $6,750 limit because of the first 3 months?

I'm using H&R Block and imported the W-2 form from our employers which include HSA contributions. When completing the HSA section for Family Health Coverage Allocation, it states that "Special rules apply if you and your spouse had both of these in 2016:

  • Separate health savings account (HSAs)
  • Family coverage under a high-deductible health plan

Did you and your spouse have both of these?"

If I select Yes, then it asks me to calculate Form 8889, line 6 amount. I read the IRS instructions and am still confused on how to calculate this. If I just select no, it just copies the line 5 amount ($4483 for me and $3646 for spouse).

Please advise if I over-contributed to my HSA and/or how to complete Form 8889, line 6. 

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rated:
Refer to IRS publication

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

From the sound of it you do appear to have overcontributed because your eligibility to contribute is evaluatey on a monthy basis.

rated:
seawolf21 said:   Refer to IRS publication

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

From the sound of it you do appear to have overcontributed because your eligibility to contribute is evaluatey on a monthy basis.

  

From that link:

"If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2016 is $6,750 even if you changed coverage during the year."


 

rated:
meade18 said:   
seawolf21 said:   Refer to IRS publication

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

From the sound of it you do appear to have overcontributed because your eligibility to contribute is evaluatey on a monthy basis.

  

From that link:

"If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2016 is $6,750 even if you changed coverage during the year."


 

  As with all things IRS, you have to read the whole thing.  Right after that sentence is the testing period and what happens if you don't remain eligible during the testing period and examples.

Example 2 probably applies and it looks like probably OP didn't over contribute after all.

rated:
seawolf21 said:   
meade18 said:   
seawolf21 said:   Refer to IRS publication

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

From the sound of it you do appear to have overcontributed because your eligibility to contribute is evaluatey on a monthy basis.

  

From that link:

"If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2016 is $6,750 even if you changed coverage during the year."


 

  As with all things IRS, you have to read the whole thing.  Right after that sentence is the testing period and what happens if you don't remain eligible during the testing period and examples.

Example 2 probably applies and it looks like probably OP didn't over contribute after all.

  
I was assuming he still had the HDHP coverage. If not, it does seem like example 2 would apply if they didn't make it through the testing period. It sounds like their testing period is ends March 31, 2017, so they should know now if they didn't make it. Assuming he had coverage through December 31, 2016 but dropped it sometime between then and March 31, 2017, the contribution looks to be limited to $6,183.33, so they would be $331.67 over. But if they still have HDHP coverage, they're good.

rated:
We still have coverage through our individual HSA plans now.

H&R Block didn't alert me to anything about excess contributions. If we passed the testing period you mentioned, now my only question would be how to fill out Form 8889, line 6.

rated:
Seems like if you select yes and it auto fills, you should be fine.

rated:
meade18 said:   Seems like if you select yes and it auto fills, you should be fine.
  
It only auto fills if I select No. Should I just say No and use the amount it gives ($4483 for me and $3646 for spouse)?

rated:
I would select yes (because based on what you said, it sounds like that's true) and input the amount that would have autofilled if you had selected no. I'm not sure where those numbers come from, but I don't think it matters too much as long as you allocate at least $4,105 for yourself and at least $2,410 for your wife.

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