2022 HSA Contribution
I have clients that are married. Both were over 55 in 2022 and both were covered by the husbands high deductible health plan through his employer. My understanding is that their aggregate 2022 HSA contribution limit is $9,300. $7,300 for the family plan and $1,000 for each of them as a catch up contribution.
The husband made $8300 of HSA contributions through his payroll deduction. The wife opened an HSA with fidelity and contributed her $1,000 (which I know has to be deducted on schedule 1 of the tax return).
The CPA is saying that the only way they could have met the $9300 2022 HSA limit is if they had funded each of their respective HSAs with $4,650. He says $8300 into the husbands HSA and $1000 into the wife’s doesn’t qualify. This doesn’t sound accurate to me.
Can you speak to this? If there are any links or IRS language that addresses this, please let me know.
Permalink Submitted by David Mertz on Thu, 2023-04-13 21:59
The CPA is wrong. What they did is fine. The family limit is permitted to be split between the spouses in any way they see fit. See “Rules for married people” on page 7 of IRS Pub 969 which comes from 26 USC 223(b)5)(B)(ii). The family limit must be split equally only if they can’t agree on some other split.
Permalink Submitted by Janie Williams on Wed, 2023-04-19 12:02
The family limit is only allowed to be split when EACH spouse has their own qualifying HDHP and HSA and one has family coverage. Since the spouse is not covered under her own plan, the TP is limited to $8300 HSA contribution for 2022. The spouse would not be allowed any contributions to her own HSA. That’s what I’ve always been taught, but a review of the eligibility rules may allow the other interpretation.
Permalink Submitted by David Mertz on Wed, 2023-04-19 12:33
It seems to be a somewhat common misconception that an eligible individual must be covered by their own HDHP plan. As long as the spouse is covered by *any* HDHP plan, the spouse is an eligible individual (assuming no other disqualifying coverage). As long as both spouses are eligible individuals and at least one of the spouses has family coverage, both are considered to have family coverage and the contribution limit can be split in any way that they agree to split the limit. See section 223(c)(1) and IRS Pub 969 for the definition of an eligible individual. (Pub 969 has an example where the spouses are covered under different plans, but being only an example it does not preclude splitting the limit when the spouses are covered under the same plan.)