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Dependent HSA

15 replies
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Student 23 is a dependent of his mother, employer contributed $100 to an hsa, error message in pro series. What needs to be done ?

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The-Tax-LadyAnswer

Level 8

Error message is taxpayer is a dependent of some one else and should not have hsa

It sounds like you are trying to put the HSA info on the dependent's return. It would go on the mother's return since it's her employer and W2.

If the HSA$$ was spent on the dependent, the info still goes on the mother's return.

qbteachmt

Level 15

The policy that allows for HSA would need to belong to the person owning the HSA.

Here:

https://www.wolterskluwer.com/en/expert-insights/health-savings-accounts-correcting-mistaken-employer-contributions

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TaxGuyBill

What does the error message say?

A dependent does not qualify to contribute to an HSA, so there may be a small penalty, but I think it should be able to go through okay.

qbteachmt

Level 15

It's like any other excess contribution, subject to 6% until removed, which they can do up to the tax return filing date, and they can get a corrected W2 as well. She needs to notify her employer or benefit/plan administrator.

Don't yell at us; we're volunteers

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TaxGuyBill

@qbteachmt wrote:

It's like any other excess contribution, subject to 6% until removed, which they can do up to the tax return filing date, and they can get a corrected W2 as well. She needs to notify her employer or benefit/plan administrator.

Spend it, and there is no penalty.

If it was the employer that contributed it, it seems silly to have them undo it. Just spend it.

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abs96

Level 4

I have a similar situation. Dependent can be claimed on mother's return for 6 mos of the year. Dependent got his own job just prior to high school graduation. There is an HSA deduction on the dependents W-2 for himself only, not family. On the 8889-T form I check self only and tried only checking for the last 6 mos of the year for the HSA coverage but get the error message that a dependent cannot claim an HSA deduction. In this case can the dependent be claimed on the mother's return when he earned $37,000 versus his mother who earned $42,000 before expenses (self employed).

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TaxGuyBill

@abs96 wrote:

In this case can the dependent be claimed on the mother's return when he earned $37,000 versus his mother who earned $42,000 before expenses (self employed).

Income has nothing to do with it.

Did the child pay for over half of his own support? When you find that out, that is your answer.

https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

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