Can I contribute to both FSA and HSA in the same tax year after changing employers?

3 You've stumbled into one of those confusing areas of tax law that trips up a lot of people! Generally speaking, you cannot contribute to both an HSA and a general-purpose FSA in the same tax year, even if they're with different employers. The IRS views this as "double-dipping" on tax advantages. However, there's a key distinction - if your FSA is a "limited purpose FSA" (sometimes called LPFSA) that only covers dental and vision expenses, then you CAN contribute to both in the same year. A regular FSA that covers medical expenses will disqualify you from HSA contributions. The timing of when you had each account matters too. If you had an FSA, then left that job and started a new job with an HSA, you need to check if your FSA grace period extends into your new employment. If your FSA coverage period overlaps with when you want to start HSA contributions, you'll need to wait until the FSA coverage period (including any grace period) ends before you can start contributing to the HSA.

12 After dealing with a similar situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that helped clear up my confusion. I was switching jobs mid-year and had both FSA and HSA questions that were giving me contradictory answers when I searched online. I uploaded my old benefits documents and severance package info to taxr.ai, and it analyzed everything to give me clear guidance on what I could and couldn't do with my healthcare accounts. Saved me from potentially making a costly mistake with the IRS! The tool explained exactly when my FSA coverage period ended and when I could start my HSA contributions without breaking any tax rules.

17 Just wanted to update that I ended up trying taxr.ai after posting my skeptical comment. I was really surprised by how helpful it actually was! I uploaded my benefits documents, and it highlighted the specific rules from my plan documents that applied to my situation. My FSA actually had a "spend-down provision" that I didn't know about, which affects when I can start HSA contributions. The tool created a custom timeline showing exactly when my HSA eligibility would begin based on my specific plan details. Definitely cleared up my confusion about the overlapping coverage issues.

8 If you're struggling to get answers directly from the IRS about this FSA/HSA situation, I'd recommend using Claimyr (https://claimyr.com). I was in a similar boat last year with healthcare account questions and couldn't get through to an IRS representative for weeks. Claimyr got me connected to an actual IRS agent in about 20 minutes when I'd been trying for days on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that I needed to wait until my FSA coverage period fully ended before I could start HSA contributions, but also explained some strategies to maximize my contributions for the remaining months of the year. Completely worth it to get official confirmation rather than wondering if I was interpreting the rules correctly.

6 I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it anyway since I was desperate for answers about my FSA/HSA situation. Within 35 minutes, I was actually speaking with an IRS representative who walked me through the exact rules for my situation. She confirmed that I needed to wait until my FSA coverage period fully ended (including the 2.5 month grace period) before I could start HSA contributions. She also explained that I could still max out my HSA for the remaining months I'm eligible this year by using the "last-month rule" - something I hadn't even known about. Honestly shocked at how well it worked after spending countless hours on hold with the IRS in previous years.

11 From my experience as a benefits admin, there's one more thing to consider that others haven't mentioned. Check if your previous FSA had a "spend-down provision" which allows you to continue using FSA funds after termination. If it did, you might still be technically covered by the FSA until those funds are exhausted or the plan year ends, which would affect your HSA eligibility timeline. Also, be aware that HSA contribution limits are typically prorated based on how many months you're HSA-eligible during the year. So if you can only contribute for part of the year, your maximum contribution would be reduced accordingly.

16 Has anyone used their HSA as an investment vehicle? My financial advisor said it's one of the best tax-advantaged accounts since it's triple tax-advantaged (tax-free contributions, growth, and qualified withdrawals). I'm considering maxing mine out even though I don't have many medical expenses.

This is such a common confusion point! I went through something similar when I switched jobs mid-year. The key thing to understand is that it's not about different employers - the IRS doesn't care where your accounts are from, they just care about the overlap in coverage periods. Your general-purpose FSA from your previous job likely has either a grace period (up to 2.5 months) or a run-out period that extends beyond your employment end date. During ANY period where you have FSA coverage - even if it's just the grace period - you cannot contribute to an HSA. I'd recommend checking your previous employer's benefits documents carefully for the exact FSA coverage end date. Many people miss this detail and assume they can start HSA contributions immediately after leaving their job. You'll need to wait until that FSA coverage completely ends before you can begin HSA contributions. Also, don't forget that once you are eligible, you can still maximize your HSA contributions for the year by contributing the prorated amount for the months you're eligible, or potentially use the last-month rule if you're eligible by December 1st.

This is exactly the kind of situation where getting professional guidance really pays off. I faced a similar challenge when transitioning between employers and found that the IRS rules around FSA/HSA overlap are more nuanced than most online resources explain. One thing I learned the hard way is that even if your FSA balance is zero, you may still be considered "covered" by the FSA during any grace period or run-out period specified in your plan documents. This coverage period can extend 2.5 months beyond your employment end date in some cases. The good news is that once your FSA coverage completely ends, you can start HSA contributions immediately (assuming you're enrolled in an HSA-eligible HDHP). You don't have to wait until the next calendar year. And if you become HSA-eligible by December 1st, you might be able to use the last-month rule to contribute the full annual amount, though that comes with the requirement to remain HSA-eligible for the entire following year. I'd strongly recommend reviewing your severance package and benefits documents carefully to identify the exact FSA coverage end date, including any grace periods. Many people overlook this detail and inadvertently make ineligible HSA contributions.

Just wanted to chime in as someone who works in benefits administration - this FSA/HSA overlap issue catches SO many people during job transitions. The confusion is totally understandable because the rules aren't intuitive. One thing I always tell people: contact your previous employer's HR or benefits team directly to get the exact FSA coverage end date in writing. Don't rely on assumptions or trying to interpret plan documents yourself. They should be able to give you a clear date when your FSA coverage (including any grace period) completely terminates. Also, keep detailed records of when you stop FSA coverage and when you start HSA contributions. If the IRS ever questions the timing, you'll want documentation showing you followed the rules correctly. I've seen people get into trouble years later during audits because they couldn't prove they had the proper gap between accounts. The silver lining is that HSAs are incredibly valuable accounts once you can start contributing - especially if your new employer offers a match. Just make sure you get the timing right to avoid any tax complications down the road.