Can I still max out HSA contribution for 2023 if spouse switched from HDHP to Medicaid mid-year?

This is actually a common HSA question when coverage changes mid-year! When one spouse switches from an HDHP to non-HDHP coverage (like Medicaid), you need to look at your HSA eligibility month by month. For the months when both of you were covered under the family HDHP (January-August), you were eligible for family contribution limits. For the months when only you were on the HDHP (September-December), you're limited to individual contribution rates. So your calculation would be: - Family rate for 8 months: $7750 ÷ 12 × 8 = $5166.67 - Individual rate for 4 months: $3850 ÷ 12 × 4 = $1283.33 - Total allowed: $5166.67 + $1283.33 = $6450 This applies since you remained HSA-eligible through the whole year while your wife was only eligible for part of it. The key is tracking month-by-month eligibility status.

I just wanted to share my experience with HSA contribution calculations after using https://taxr.ai to figure this out for my own situation. My scenario was similar - my wife switched from our family HDHP to her employer's non-HDHP plan in July last year. I uploaded our insurance documents and tax info to the system, and it provided a detailed breakdown showing exactly how to calculate the prorated amounts. It confirmed what others have said here - you use the family contribution limit for months when both spouses have HDHP coverage, then switch to individual limits for months when only one spouse has HDHP coverage. The tool even provided documentation explaining the relevant IRS rules that apply to this situation. Saved me from accidentally over-contributing which would have been a headache to fix later!

Just wanted to follow up after trying taxr.ai for my complicated HSA situation. I was skeptical at first but decided to give it a try since my situation was even more complex than I initially explained. I uploaded our insurance documents showing the coverage changes throughout the year, and the system provided a detailed month-by-month breakdown. It showed exactly which months qualified for individual vs. family contribution limits and calculated the maximum allowable contribution. Even more helpful, it explained how the "last-month rule" might apply to my situation and the requirements I'd need to meet in 2024 if I chose to use that option. What surprised me was how it flagged a potential issue with my spouse's limited-purpose FSA that would have reduced our eligible contribution amount - something I completely overlooked! Definitely saved me from a potential audit headache.

For anyone struggling to reach the IRS about HSA contribution questions, I highly recommend using https://claimyr.com to get through. I spent HOURS on hold trying to get clarification about my specific HSA situation (similar to yours but with different complications). You can see how it works in this video: https://youtu.be/_kiP6q8DX5c After using Claimyr, I was connected to an IRS agent in about 20 minutes instead of the 2+ hours I was experiencing before. The agent walked me through exactly how to handle my HSA contributions with coverage changes and confirmed the month-by-month calculation method. They even emailed me documentation about the specific rules that applied to my situation. It's definitely worth trying if you need authoritative answers directly from the IRS about your specific situation, especially with HSAs where the rules can get complicated with coverage changes.

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I decided to try it since I was desperate to resolve my HSA question before filing my taxes this week. I signed up yesterday afternoon around 4pm, expecting it would probably be a waste of money. To my genuine surprise, I got a call back about 25 minutes later saying they were about to connect me with an IRS agent. Within seconds, I was talking to a real person at the IRS who answered all my HSA questions thoroughly. The agent confirmed I was calculating my prorated HSA contribution correctly and explained exactly which form to use to report my excess contribution from last year (Form 5329). He even walked me through the penalty calculation and how to request a waiver since my mistake was reasonable. I've literally never gotten through to the IRS on the first try before, so I'm genuinely impressed. Totally worth it during tax season when the wait times are insane.

One thing to watch out for with HSA contribution limits when coverage changes: make sure you're also meeting the coverage requirements each month! You mentioned your wife switched to Medicaid in September, but for you to claim the individual HSA contribution for those remaining months (Sept-Dec), you need to verify your plan still qualified as an HDHP with the right deductible amounts after she left. Sometimes plans can change status or category when household members change. Check with your insurance provider to confirm your plan maintained its HDHP status for HSA purposes through the end of the year, even after your wife switched to Medicaid. The 2023 requirements were a minimum deductible of $1,500 for individual coverage and maximum out-of-pocket of $7,500.

Has anyone used the "last-month rule" instead of prorating in situations like this? From what I understand, if you're eligible on December 1st, you can contribute the full annual amount (individual or family based on December status) as long as you remain eligible through the end of the following year. Would that work in the original poster's situation?

This is a great breakdown of how to handle HSA contributions with mid-year coverage changes! I wanted to add one important point about timing that might help others in similar situations. When making these prorated contributions, you have until the tax filing deadline (typically April 15th of the following year) to make HSA contributions for the previous tax year. So even though you're figuring this out now, you still have time to make the calculated $6,450 contribution for 2023 if you haven't already maxed it out. Also, make sure to keep detailed records of the coverage change dates and your calculations. The IRS may want documentation if they ever question your contribution amounts, especially with the complexity of mid-year switches between family and individual coverage. Your insurance company should be able to provide letters or statements showing exactly when coverage types changed. Congratulations on the pregnancy, by the way! Once your little one arrives, you'll likely be able to switch back to family HDHP coverage and family contribution limits if that makes sense for your situation.