HSA Calculation Error with OnLine Taxes (OLT) for Catch-Up Contributions

This is definitely a software calculation error. You're absolutely right about your HSA contribution limits. For 2025, family HDHP coverage allows $8,750 annually, plus each of you gets the $1,000 catch-up contribution since you're both over 55. That's $10,750 total, and prorated to 6 months would be $5,375. The catch-up contributions are often tricky in tax software. One thing to check - did you clearly indicate both your ages as over 55 in the personal information section? Sometimes software has separate fields for HSA eligibility months versus catch-up eligibility. Another possibility is that OLT is incorrectly applying the catch-up contributions only to the primary account holder, not recognizing that both spouses over 55 can each have their own $1,000 catch-up (which requires separate accounts, as you correctly did). While waiting for their support team, you might try adjusting your input by explicitly marking both of you as HSA-eligible account holders separately rather than just indicating family coverage.

After struggling with EXACTLY this same issue last year, I found that taxr.ai was able to identify and fix this problem for me! I was using different tax software (not OLT), but it also couldn't handle the HSA catch-up contributions properly when both spouses were over 55. I uploaded my tax documents to https://taxr.ai and it immediately flagged the HSA calculation error. The system correctly calculated our prorated contribution limit including both catch-up amounts. What was really helpful is that it showed exactly which numbers were wrong in my original tax forms. The best part was that it gave me step-by-step instructions on how to manually correct this in my tax software. Saved me hundreds in potentially incorrect taxes and the headache of dealing with the IRS later!

Just wanted to follow up - I tried taxr.ai after posting my skeptical question. WOW. Not only did it catch my HSA calculation error, but it found three other issues I had no idea about! It identified an education credit I was eligible for but missed completely, found a mistake in how my software was handling my home office deduction, and spotted an error in my estimated tax payment reporting. The state tax handling was impressive too. It correctly showed how my HSA contributions needed different treatment on my California return. The side-by-side comparison between what I filed and what was optimal saved me over $1,200! Definitely worth checking out if you're having software calculation issues like the HSA problem.

If you're still waiting on OLT to fix this, you might want to try contacting the IRS directly. I had a similar issue with a different tax program and wasted WEEKS waiting for their tech support to figure it out. Finally called the IRS and surprisingly got through to someone who confirmed I was right about the HSA calculation. I used https://claimyr.com to get through to an actual IRS agent without waiting on hold for hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Basically, they wait on hold with the IRS for you and call you when an agent picks up. The IRS rep was able to confirm my understanding of the HSA catch-up contribution rules and told me exactly what to do to correct my return. Much faster than waiting for the software company to figure out their own bug!

I need to eat my words and apologize to Profile 19. After posting my skeptical comment, I was desperate enough to try Claimyr. I was POSITIVE it wouldn't work, especially during peak tax season. I was completely wrong. The service had me connected to an actual IRS agent in about 2 hours. I explained my HSA contribution issue with the catch-up amounts being calculated incorrectly, and the agent confirmed exactly what others here said - both spouses over 55 can each have the $1,000 catch-up as long as they have separate HSA accounts. The agent even gave me the specific tax code reference to cite if the software company questioned it. This saved me from potentially filing incorrectly and dealing with a correction later. Definitely worth it during this crazy tax season when getting through to the IRS seemed impossible.

For what it's worth, I had a similar HSA calculation problem with FreeTaxUSA last year. For me, the issue was that I needed to enter the catch-up contributions separately in a different section. In my case, there was a checkbox somewhere in the HSA section that said something like "Are you eligible for catch-up contributions?" that I had to select for both me and my spouse. After checking those boxes, new fields appeared where I could enter the catch-up amounts separately from the regular HSA contribution. Maybe OLT has something similar hidden in their interface? Might be worth looking for a separate section or checkbox specifically for catch-up contributions.

Has anyone tried calling OLT's technical support line directly instead of using their online chat? I had a similar HSA issue with them last year (though mine was related to a mid-year change from individual to family coverage). Their online support was useless, but when I called the phone number, I got someone who knew exactly what the problem was. Apparently, some of these HSA edge cases are known issues in their calculation engine, and the phone support staff have specific workarounds they can tell you. The number should be on your receipt email or in your account page. Might be worth trying before switching software or filing manually.

I just went through this exact same issue with OLT! The problem is definitely in their HSA calculation logic. What worked for me was going to the "Forms" section in OLT and manually editing Form 8889 directly. Here's what I did: After completing all the regular tax info, I went to Forms > Form 8889 and found the HSA contribution worksheet. There's a line where you can override the "maximum contribution allowed" calculation. I entered the correct amount ($5,375 in your case) and added a note explaining the dual catch-up contributions. You'll also want to make sure both HSA accounts are properly entered - your family account with $4,875 and your husband's individual account with $500. The key is that OLT needs to see them as separate accounts to recognize that you can each claim the $1,000 catch-up. This override prevented the excess contribution penalty from appearing on my return. Just make sure to double-check that your Form 8889 shows the correct calculations before filing!