Level 15
10-27-2020
10:25 AM
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If your client funded an HSA while his wife had an open FSA then you need to remove funds including any interest or pay a 6% excise tax. Your client cannot open an HSA while his wife's FSA is open, even if it doesn't have funds. There is a way for his wife to have a limited FSA, and your client to have a HSA, but I am not familiar with the rules. Maybe someone who is will jump in.