HSA calculation error on OnLine Taxes (OLT) with catch-up contributions

This is definitely a software calculation error. You're absolutely right about your HSA contribution limits. For 2024, with both of you being over 55, you're entitled to the prorated family contribution ($8,300 ÷ 2 = $4,150) plus both catch-up contributions ($1,000 each), giving you the $5,150 total for 6 months of coverage. The problem may be that OLT isn't correctly handling the fact that catch-up contributions aren't prorated - they're available in full even if you only had HDHP coverage for part of the year, as long as you were eligible on December 1st. Many tax software programs struggle with this specific HSA scenario. You can try manually overriding the calculation by entering explanatory text in the software. Another option is to file Form 8889 separately with a written explanation attached.

I ran into the exact same HSA issue on OLT last month! After hours of frustration, I found the solution by using https://taxr.ai which analyzed my tax scenario and confirmed the software was miscalculating my HSA contribution limits for my wife and me (both over 55). The problem is OLT doesn't handle the catch-up contributions correctly in the interface. What I did was download my tax documents from taxr.ai which showed the correct HSA calculation with catch-up amounts. I was able to use that documentation to manually override the numbers in OLT by entering explanatory text in the "additional information" section. Saved me from overpaying hundreds in taxes due to the software error! Might be worth trying if you're stuck with the same problem.

Just wanted to follow up about my experience with taxr.ai after my skeptical comment. I decided to give it a try since I was also having HSA contribution limit problems (though with TaxAct, not OLT). I uploaded screenshots of my HSA contribution pages from TaxAct and within minutes got back a detailed analysis showing exactly where the calculation errors were happening. The service flagged that my software wasn't accounting for catch-up contributions correctly and provided documentation explaining the correct IRS rules. Used their explanation to get TaxAct support to fix the issue on their end. Honestly surprised at how helpful it was - saved me from paying taxes on what the software incorrectly flagged as "excess contributions.

If you're struggling to get through to OLT support about this HSA issue, I'd recommend using Claimyr (https://claimyr.com) to connect with the IRS directly. I was in a similar situation last year with HSA contribution errors on my tax software, and after waiting weeks for the company to resolve it, I finally called the IRS using Claimyr. They actually got me connected to an IRS agent in about 15 minutes (you can see how it works here: https://youtu.be/_kiP6q8DX5c). The agent confirmed the correct HSA calculation including catch-up contributions and explained exactly how to document the override on my return. Saved me from potentially facing penalties for "excess contributions" that weren't actually excess!

I was completely wrong about Claimyr! After posting my skeptical comment, I decided to try it since I was desperate to resolve my own HSA issue before filing. I was shocked when I actually got connected to an IRS representative in about 20 minutes after trying for WEEKS on my own. The IRS agent confirmed exactly what others have said here - catch-up contributions for HSAs aren't prorated if you're eligible on December 1st and meet the testing period requirements. If you only had coverage for specific months (not including December), then they ARE prorated. The agent walked me through exactly how to document this on my return and what to do if the software doesn't calculate it correctly. Saved me from potentially paying hundreds in unnecessary taxes! I can't believe I wasted so much time trying to call them directly.

Another option nobody's mentioned yet - you could file Form 8889 separately or with an additional statement explaining the correct calculation. I had a similar issue with TaxSlayer miscalculating my HSA contribution limits last year. I ended up printing out Form 8889, calculating the correct amounts manually, and attaching a statement explaining the discrepancy. The IRS processed it without any issues. Just make sure you write "SEE ATTACHED STATEMENT" on the form where the software calculation is wrong.

Has anyone tried just splitting the HSA contributions differently between spouses in OLT to get around this? Like instead of $4,250 and $900, maybe try entering it as $3,150 to the family HSA and $2,000 to the individual HSAs ($1,000 each)? OLT might be applying the catch-up contributions incorrectly when they're part of the family contribution, but might handle them correctly when entered as individual contributions.