HSA contribution when spouse dies during year

Forum|Forum|6 years ago
August 12, 2020
5 replies
60 views

New client lost his wife to cancer in April 2019. They contributed $8000 to their HSA at the beginning of the year. Would there be an excess contribution that needs to be added back as income?

Another complication is that he turned 65 in 2019. I am waiting to hear if he started medicare and had HDHP.

ProSeries Professional

This topic has been closed for replies.

Best answer by qbteachmt

See if this article is helpful:

https://dpath.com/mid-year-change-of-status-hsa/

qbteachmt

Level 15

Unfortunately, a HDHP under Medicare is not HSA qualified.

You would remove the overage, once you do the math for what is his limit for the year, and do so before the due date (which includes extension) of that return. Make sure to remove any earnings, as well. Don't leave it and keep paying the 6% excise tax and it seems you won't have any amount to "let it ride, pay the fee once, then apply it to the next year" if he now is on Medicare.

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T

taxesbydotAuthor

Level 4

Unfortunately, I am amending the return because he didn't tell me about the contribution in the first place. Would she be eligible up until date of death?

qbteachmt

Level 15

HSA contributions are factored by monthly qualification. Died in April = 4/12 qualified. He goes on Medicare in July = 6/12 qualified. Don't overlook each of them might also be qualified for the $1,000 catchup amount for being 55 or older.

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