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8889 with two HSA's, on a self-only plan one a family plan

Forum|Forum|5 years ago
March 4, 2021
3 replies
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I have a married couple filing jointly, both have HSA's one is a self-only and the other is a family HSA. The whole family is covered by HDHPs. Both plans received employer contributions. The instructions say to disregard the Self-only plan. The Self-only plan had contributions. Do I really just ignore it? When I report both plans, the sum of the amounts on both form's line 3 exceed the maximum family amount of $7,100 for the year. I would think it would make more sense to allocate $7,100 between the two forms but I could not find an override. Do I really just ignore it? I feel like I am missing something.

Thanks!!!

Lacerte Tax

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Best answer by qbteachmt

This?

"Line 3

When figuring the amount to enter on line 3, apply the following rules.

Use the family coverage amount if you or your spouse had an HDHP with family coverage. Disregard any plan with self-only coverage."

https://www.irs.gov/instructions/i8889

Example: $7,100 for that person's coverage as Family, but since the other person could have put $3,550 in their HSA for individual coverage, that leaves only $3,550 for the Family coverage HSA account. The Plan limit is the Family limit, but that isn't a specific account limit.

rbynaker

Level 13

You disregard the self-only HDHP plan. You don't disregard the HSA contributions. You can allocate the $7,100 contribution limit however you want to (and then it gets wonky if one or both spouses are over 55). But you can't have total contributions in excess of $7,100 between TP and SP HSA accounts (assuming both under 55). If you have TP contributions of $3,550 and SP contributions of $7,100 then you're over the limit and something needs to be corrected ASAP. If you have $2,000 TP and $5,100 SP, no worries, you just need to convince the software to put the right numbers on Line 6 of your 8889 forms.

Rick

R

RoxieAuthor

Level 2

Hi Rick,

Thanks for helping me with this... I found the form instructions unclear.

Fortunately, the combined contribution amount is below $7,100.

It is line 3 (plan contribution limit) that I am having issues with, not line 6 (contributions). Line 6 worked out. But the sum of lines 3 is $10,650 ($3,550 for the self-only, and $7,100 for the Family). Maybe that does not matter?

But I am still not sure how to disregard the self-only plan.

Thanks!

Roxie

qbteachmt

Level 15

"Fortunately, the combined contribution amount is below $7,100."

?

You already told us this: "When I report both plans, the sum of the amounts on both form's line 3 exceed the maximum family amount of $7,100 for the year."

The Family Plan entitles them to the Family amount, and there is an over-55 additional $1,000 for the person with the Family coverage HSA. Or: "Married couples who both are over age 55 may each make an additional $1,000 contribution to their separate HSAs."

That is why it is based on Accounts, which are individually owned.

Don't yell at us; we're volunteers

BobKamman

Level 15

https://www.griffinbenefits.com/blog/how-hsa-contribution-limits-work-for-spouses-and-multiple-accounts

R

RoxieAuthor

Level 2

Thanks Bob!

Great article. I have added it to my library.

Roxie

qbteachmt

Level 15

Just to clarify: "both have HSA's one is a self-only and the other is a family HSA."

HSA accounts are individually owned. There is no "family" HSA. There is the Right to have an HSA because of specific types of coverage. For instance, the person who owns the "family" HSA might go on Medicare before the other individual, so that HSA account is no longer qualified to receive contributions.

"the sum of the amounts on both form's line 3 exceed the maximum family amount of $7,100 for the year."

It seems they need a corrective distribution and there's still time to do it for 2020.

Don't yell at us; we're volunteers

R

RoxieAuthor

Level 2

Thanks for your response...

Yes, they each have an HSA, one is a self-only and the other is a "family" plan. Combined, they contributed less than the maximum $7,100 for the year.. so that is good. That's line 6.

Line 3 is the plan coverage limit. The two forms combined total $10,650. It does not affect the returns bottom line but I would have expected to be able to allocate line 3 similar to how I allocated line 6. Maybe it does not matter?

Roxie

qbteachmt

Level 15

You also told us this: "Both plans received employer contributions."

Did the insured contribute through payroll? That should already be in the W2 data.

I guess I'm a bit lost; are you asking about their contribution limit (based on wages and coverage) or their allowed contribution limit per account?

How much went into whose account?

Don't yell at us; we're volunteers

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