Level 3

Question

Domestic Partnerships and HSA's

Forum|Forum|4 years ago
August 25, 2021
3 replies
24 views

First off, I want to say this is my first year with these clients. I have one client, who after I filed his return and he got an IRS notice about his HSA, tells me he is in a domestic partnership. He list his partner with his work for his HSA so he can contribute the max amount. He contributed 7100 last year and is being taxed on the overage. He is stating and I confirmed that he has never been taxed before on it. I have looked thru previous returns and he has never paid for it. The previous accountant passed away unexpectedly so I can not ask her and the other CPA's I have talked to has never heard of this. She used a different software so I have no clue if she overrode a number because it doesn't match up. Has anyone encountered domestic partnerships and HSA's? Am I missing something in Proseries on domestic partnerships?

ProSeries Professional

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

They probably marked that he had a Family plan on the 8889, not Self, which raised his contribution cap.

Whether this is correct or not, Im not sure....I dont have any domestic partnership clients.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

S

Sherryb75Author

Level 3

I thought that two but when I look back at everything in previous years he is marked as single.. I have everything matching what previous accountant did but I can not get rid of the 5329

qbteachmt

Level 15

"but when I look back at everything in previous years he is marked as single."

Single for tax purposes, but Family for coverage purposes.

This is an issue of jurisdiction. The employer follows a State rule that Domestic partners are allowed/required to be offered health plan coverage and the health plan provider offers it as pseudo-family. That isn't Spousal.

Meanwhile, the tax filing is considered non-spouse, as well. So, the person is Single, but the health plan is Family, and that means two individual HSA accounts. And, as I pointed out, the accounts cannot be used for the other party, as you would do in a true family relationship.

And make sure to read the link references, and the IRS, if the other party was claimed under dependent, because that eliminates the other HSA.

Don't yell at us; we're volunteers

qbteachmt

Level 15

"He contributed 7100 last year and is being taxed on the overage."

To one account, or to two? My understanding is that this would be split into each of two individual accounts, because they are not married and are not supposed to pay for the "other" individual out of your Taxpayer's HSA account. HSA is an individually-owned account; even if both are covered under the same high deductible insurance plan as registered domestic partners, that qualifies them each for having their own account, and the family total would be split across the two accounts.

Try this:

https://hsa.umb.com/employers/education-tools/faq/eligible+for+an+hsa/_domestic+partners+eligible

Don't yell at us; we're volunteers

S

Sherryb75Author

Level 3

Everything you have said has made sense. I just have to figure out how to do it in the software. The previous accountant must have did overrides in the old software as he has never had a 5329 before.

George4Tacks

Level 15

Here is a novel idea! Maybe the prior preparer never entered a code W from box 12?

Don't tell and probably IRS would never ask. That'll teach you to do things right!!!

Answers are easy. Questions are hard!

George4Tacks

Level 15

Did the W2 have that amount as code W in box 12?

Did you enter the amount anywhere else in the program?

Is this a California RDP?

Answers are easy. Questions are hard!

S

Sherryb75Author

Level 3

Yes it has a W and no I did not enter that amount anywhere else. It auto carried in places.

T

Terry53029

Intuit Community Champion

You have to fill out the 8889, and you can choose family coverage, then the 5329 goes away, but I don't think you can use family coverage, unless you are married filing joint. Maybe for some states, but not federal. You should also indicate on the information work sheet at the bottom that this is a registered Domestic Partnership or civil union.

Sign up

Login with SSO

Let's get you signed in

Login with SSO