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HSA Contributions

 


HSA Contribution Forms

Form 5498-SA: Reports a taxpayers total contributions to the HSA

 Total Contributions on Form 5498-SA include:  Taxpayer’s contributions AND Contributions made on behalf of the taxpayer:  

For example, if the taxpayer’s aunt contributed money into the HSA on behalf of the taxpayer, that will be considered a contribution made by the taxpayer.

Employer’s contributions  Typically shown on the Form W-2, Box 12, Code W  

These contributions may also be reported on the 5498-SA 

Taxpayers will often think they made contributions to their HSA because the contribution comes out of their paycheck. However, these contributions are considered as being made by the employer for tax purposes.  To clarify,  ask the taxpayer if the contribution that they made is the same amount as what is on Form W-2, Box 12, Code W  If so, these will be considered contributions made by the employer and should not be reported elsewhere in TaxSlayer.


HSA Contribution Limits and Rules

 HSA’s have contribution limits  

Limits for 2020

  •  $3,550 for self-only coverage  
  • $7,100 for family coverage  

Taxpayers age 55 and older are eligible to make additional $1,000 “Catch Up,” contributions into their accounts on top of the existing cap.

Special Considerations

 If a taxpayer only has an HSA for part of the year, they may only make contributions for the months in which they are eligible. This means their contribution limits will be proportional to the amounts listed.

To determine the contribution limits, you must determine the monthly limit, then apply that to how long the taxpayer participated in the HSA .

 Alternatively, taxpayers who are enrolled in an HSA by December 1st of the tax year may contribute up to the yearly limits.

 Thus the amount that can be contributed to an HSA depends on the taxpayer’s age and type of HDHP coverage, the date the taxpayer became eligible for the HSA, and the date the taxpayer ceases to become eligible.

Example: Michael, age 35, had an HSA that covered himself from January – June. Since the annual contribution for a self-only policy is $3,550, we will divide that by 12 to get the monthly contribution amount.  

  • 3,550/12= $295.83  
  • $295.83 x 6 months = $1,775

Michael’s contribution limit for the sixth months he was enrolled in the HSA is $1,775.

 Example: Beth enrolled in an HDHP and started and self-only HSA in November of 2020. She is still enrolled in the HDHP.

 Since Beth started the HSA before December 1st, 2019, she is eligible to contribute the maximum $3,550 into her HSA.


Entering HSA Contributions in TaxSlayer

 To enter HSA Contributions in TaxSlayer, we will go to the menu item for Form 8889  

Deductions –> Adjustments –> Health Savings Account Form 8889

You will start by entering in:

  • The type of HSA (Self-only or Family plan)
  • How much the taxpayer (not the employer) contributed to the HSA
  • The number of months the taxpayer was a qualified individual for the HSA