HSA Max Contribution Confusion for Married Couple with Separate HDHP Plans

Thank you for the explanation! So just to make sure I understand - even though I have my own individual HDHP through my employer now, the fact that I'm also covered under my husband's family plan means we're still limited to the $8,550 family max between both our accounts? And a follow-up question - does it matter that my husband's HSA is with Fidelity and mine is with HealthEquity through my new employer? Can we still split the $8,550 between these different HSA administrators?

Yes, that's exactly right. Even though you have your own individual HDHP, since you're also covered under your husband's family plan, your combined contributions can't exceed the family limit of $8,550. The IRS looks at your total coverage situation, not just each plan in isolation. It doesn't matter at all that your HSAs are with different administrators. You can split the $8,550 between the Fidelity and HealthEquity accounts however you choose. Just make sure you're tracking the total contributions across both accounts to avoid exceeding the limit.

Does taxr.ai tell you how to fix it if you've already over-contributed? My wife and I might have messed this up for 2024...we both maxed out our individual HSAs thinking we could each do the max.

But how does the system know which HSA belongs to which spouse when filing taxes? Like if we're filing jointly, does the IRS automatically flag if our combined HSA contributions exceed the family max?

Yes, they actually walked me through the excess contribution removal process! You'll need to contact your HSA provider to request removal of excess contributions before you file your taxes. If you've already filed, you might need to do an amended return. The tool gives you a step-by-step guide based on your specific situation. For your question about how the IRS tracks this - HSA contributions are reported on Form 5498-SA which your HSA providers send to both you and the IRS. When filing jointly, the IRS can see the total contributions across all your HSAs and will flag if they exceed the family maximum. They're getting pretty sophisticated about cross-checking these things.

How does Claimyr actually work? I've been trying to call the IRS for weeks about my HSA issue but keep getting the "due to high call volume" message and getting disconnected.

I'm skeptical. IRS agents aren't known for giving the most accurate advice over the phone. Did you get anything in writing? Did they actually solve your specific situation or just cite general rules?

It's actually pretty simple - you put in your phone number on their website, and they use an automated system to call the IRS and navigate through all the prompts and waiting periods. Once they get a human on the line, they call you and connect you directly to the agent. Basically skips all the hold time nightmare. I understand your skepticism. The agent didn't provide anything in writing, but they did walk me through the specific IRS regulations that applied to my situation (Publication 969 sections about mid-year changes). They explained exactly which forms I needed to complete and how to document my contributions correctly. I took detailed notes during the call and followed their instructions, and my tax return was processed without any issues. It was definitely more helpful than the generic info I found online.

That's really helpful info about the catch-up contributions! We're not over 55 yet, but good to know for future planning. I didn't realize employer contributions count toward the limit - that's super important! My new employer contributes $750 annually and my husband's contributes $1,200, so that means we can only add $6,600 ourselves. Almost made a big mistake there!

You're welcome! And yes, the employer contribution thing trips up a lot of people. It's all considered part of the same annual limit. One more thing - keep in mind that HSA contribution limits are prorated if you don't have HDHP coverage for the full year. So if you started your new job and HDHP in December 2024, your 2024 contribution limit would be prorated for just that one month (basically the annual limit divided by 12). But for 2025, if you maintain HDHP coverage all year, you'll get the full annual limit.

Yes, you absolutely can! I did this last year to consolidate my old employer HSA with my new one. You have two options: 1. Trustee-to-trustee transfer: Have one HSA provider directly transfer funds to the other. These are unlimited and don't count as contributions. 2. Rollover: Withdraw from one HSA and deposit into another within 60 days. You're limited to one rollover per 12-month period. I recommend the trustee-to-trustee transfer since there's less chance of making a mistake. Just call the receiving HSA company (the one you want to keep) and they'll help you set it up.

Great questions! You definitely want to coordinate throughout the year rather than waiting until year-end. I learned this the hard way when my spouse's employer front-loaded their HSA contributions in the first quarter and I didn't realize it until we were already over the limit. The good news is that if you catch an excess contribution before filing your taxes, you can usually avoid penalties by requesting removal of the excess contributions (plus any earnings) from your HSA administrator. Most providers are used to handling these requests. You'll need to do this by the tax filing deadline (including extensions) for that tax year. If you think you might have exceeded the limit for 2024, I'd recommend calculating your total contributions ASAP and contacting your HSA provider if you need to remove excess contributions. The sooner you catch it, the easier it is to fix! As for coordination, we set up a shared spreadsheet to track both of our contributions and employer matches throughout the year. It's a bit of extra work but way better than dealing with excess contribution headaches later.

This is such a smart approach! The texting system is brilliant - I wish I had thought of that before we accidentally over-contributed last year. It's crazy that HSA providers don't have any cross-communication to flag when married couples are exceeding family limits across different accounts. Your point about HealthEquity being helpful is reassuring too. I've been dreading having to call them about potentially fixing our 2024 mess, but sounds like they're used to handling these situations. Did they charge any fees for removing the excess contributions? Also wondering - when you had to remove earnings along with the excess contribution, how did they calculate what counted as "earnings"? Was it just a pro-rated amount based on your account's overall performance?

This coordination approach is so smart! I'm definitely going to implement something similar with my spouse. One question about the earnings calculation - when HealthEquity calculated the earnings that needed to be removed with your excess contribution, did they base it on your entire account performance or just allocate earnings proportionally to the excess amount? I'm trying to understand how much I might need to remove if we've over-contributed for 2024. Also, did the removal affect your contribution limit for the following year at all, or does it just clean the slate for that tax year once it's corrected?

Great question about the earnings calculation! HealthEquity calculated it proportionally based on just the excess contribution amount, not my entire account. So if I over-contributed $1,000 and my account had earned 5% overall that year, they removed about $50 in earnings along with the $1,000 excess. They have a specific formula they use that tracks when each contribution was made and allocates earnings accordingly. No fees for the removal process, which was a relief! And it doesn't affect your contribution limit for the following year at all - once the excess is removed, it's like it never happened for tax purposes. You get a corrected 1099-SA showing the removal. The whole process took about 10 business days from when I submitted the request to when I received the check for the excess amount plus earnings. Just make sure you don't spend that money since you'll need to pay taxes on any earnings that were removed!

Great question about mid-year coverage changes! This is actually where HSA rules get even more complex. Generally, your contribution limit is determined by your coverage on the first day of each month, and you calculate your annual limit by adding up each month's eligibility. So if you switch from individual HDHP to family coverage in June, you'd be eligible for individual limits (1/12 × $4,300 = ~$358 per month) for January through May, then family limits for June through December. However, there's a "last-month rule" that can simplify this - if you have qualifying HDHP coverage on December 1st, you can contribute the full annual limit for that coverage type, but then you must maintain that same coverage through the end of the following year. Since you're going from individual to family coverage mid-year, you'd likely benefit from this rule as it would let you contribute up to the full family limit ($8,550 total between you and your spouse) for 2025. Just make sure you maintain the family coverage through the end of 2026 to avoid recapture penalties. I'd definitely recommend confirming this with your tax preparer or the IRS directly given how tricky these mid-year change rules can be!

I totally understand the overwhelm! I was in your exact situation last year with the automatic payroll deductions making coordination tricky. Here's what worked for us: I contacted my husband's HR department and asked them to reduce his automatic HSA deduction to about 60% of what would max out his individual contribution. This gave us a "buffer" so we could manually add contributions throughout the year while tracking our combined total. We set up a monthly calendar reminder to review our contributions and adjust as needed. As for Publication 969, it's definitely dense government-speak, but sections 2 and 3 are actually pretty helpful once you get used to the terminology. The key part for your situation is that having dual coverage (family + individual HDHP) means you're still bound by the family contribution limit - the IRS looks at your "most comprehensive" coverage. One practical tip: consider using a simple shared Google Sheet with columns for date, amount, whose account, and running total. Update it whenever either of you contributes. It takes 30 seconds but saves so much stress later! You're definitely not alone in finding this confusing - the HSA rules seem designed to trip people up. But once you get a system in place, it becomes much more manageable.

Great questions about record-keeping! From a documentation standpoint, you don't need to file anything special with the IRS to show coordination between your HSAs. The IRS receives Form 5498-SA from each HSA provider showing contributions, and when you file jointly, they can see your combined total. The key is just making sure you don't exceed the $8,550 family limit. For your employer's front-loaded contribution, yes, you need to account for that $1,200 from January onward. So you'd have $7,350 remaining for personal contributions throughout the year ($8,550 - $1,200 = $7,350). It doesn't matter when during the year the employer contribution is made - it all counts toward your annual limit. I'd recommend setting up tracking from day one of the year rather than waiting until December to reconcile. We learned this lesson the hard way! A simple shared spreadsheet with each contribution logged as it happens has saved us from several potential over-contribution situations. One tip: contact both HSA providers and ask if they can set up automatic alerts when you're approaching certain contribution thresholds. Some providers offer this feature which can be helpful as an extra safeguard.

This is exactly the kind of practical advice I needed to hear! The "coverage situation vs. account situation" distinction really clarifies things - I was definitely falling into that same "two accounts = two limits" trap. The monthly HSA check-in idea is brilliant and something we're definitely going to implement. It's such a simple way to avoid the stress and hassle of dealing with excess contributions later. I'm curious about your mention of strategically allocating contributions between accounts - have you found significant differences in investment options or fees between HSA providers? My husband's Fidelity HSA seems to have better investment choices than my HealthEquity account, so I'm wondering if we should prioritize maxing out the account with better long-term growth potential after we ensure we're getting full employer matches from both. Thanks for sharing your experience with the tax software catch - that's exactly the kind of safety net I hope we have in place when we file for 2025!

Absolutely agree with your key takeaway! The "most comprehensive coverage" rule is really the crucial concept that trips up so many people (myself included when I first encountered this situation). One thing I'd add to your excellent summary - it's also worth noting that this coordination challenge gets even more complex if either spouse changes jobs mid-year or if there are changes to employer HSA contribution amounts. We learned to build in a small buffer in our contributions specifically to account for any unexpected employer contribution changes throughout the year. The lack of built-in coordination features between HSA providers is honestly mind-boggling given how common dual-coverage situations are for married couples. It really does put the burden entirely on individuals to track and coordinate, which seems like a perfect recipe for the over-contribution mistakes we've all been discussing. Your point about factoring in employer contributions from day one is spot-on - that's probably the single biggest oversight I see people make. Those contributions can really add up quickly, especially if employers front-load them early in the year!

Thank you so much for the professional perspective! This is exactly the kind of expert clarification I was hoping to see in this discussion. Your point about the "last-month rule" testing period is particularly important - I can see how that recapture penalty could really catch people off guard if they're not aware they need to maintain the same coverage through the entire following year. That's definitely something to factor into job change decisions. The record-keeping tip about logging date, amount, and source is brilliant and seems so obvious in hindsight. I'm definitely going to set up a simple spreadsheet with those columns for 2025. One follow-up question if you don't mind - when you mention the 6% excise tax on excess contributions, does that apply every year the excess amount remains in the account, or is it a one-time penalty? I want to make sure I understand the full cost of accidentally over-contributing and not catching it in time. Also, do you have any recommendations for tax software that's particularly good at flagging HSA over-contribution issues for married couples filing jointly? It sounds like some are better than others at catching these coordination problems. Thanks again for sharing your expertise - having a professional confirm that all these coordination strategies are actually necessary and recommended is really reassuring!

Great question about the 6% excise tax! Unfortunately, it's not a one-time penalty - it applies EVERY year that excess contributions remain in your HSA. So if you over-contribute by $1,000 and don't catch it, you'll owe $60 in excise tax for that year, then another $60 the next year, and so on until the excess is removed. This is why catching and correcting over-contributions quickly is so important. Regarding tax software, I've found that TurboTax and TaxAct are generally pretty good at flagging HSA issues when you enter multiple 5498-SA forms during a joint return. However, they're not perfect - the software can only flag what you input, so if you don't accurately report all employer contributions or forget to include one spouse's HSA, it might miss the problem. FreeTaxUSA has also improved their HSA error checking recently. The key is making sure you input ALL HSA-related forms (5498-SA for contributions, 1099-SA for distributions) from both spouses' accounts. One pro tip: before filing, manually add up all HSA contributions from both spouses (including employer contributions) and verify it doesn't exceed $8,550. Don't rely solely on software to catch coordination issues between multiple accounts - a quick manual double-check can save you a lot of headaches later!

Welcome to the HSA confusion club! 😅 You've definitely come to the right thread - I was in your exact shoes just a few months ago and made pretty much every mistake people have mentioned here. The employer contribution thing especially caught me off guard. My HR department never emphasized that their $1,500 annual contribution counted toward our family limit, so we almost over-contributed by that exact amount before catching it during our year-end review. One thing I'd add to all the great coordination strategies mentioned - consider setting up alerts in your phone for quarterly HSA reviews, not just monthly. We found monthly was almost too frequent and we'd sometimes skip it, but quarterly felt more manageable and still caught issues before they became major problems. Also, if you're just starting out with HSAs, I'd recommend beginning with conservative contribution amounts for the first few months while you get your tracking system in place. It's much easier to increase contributions later in the year than to deal with excess contribution removal. The learning curve is steep, but once you get a system down it becomes second nature. This thread would have saved me hours of research and stress when I was starting out!