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If filing separately can I override HSA limit to $7100? Taxpayer has family coverage/HSA. Spouse has no health ins - is covered by T. Line 6 of 8889 Default was $3550.

gregandrews
Level 1
My research - no IRS limit for a separate return - just $7100 total for family coverage. Not exceeding that since spouse will not use any of that $7100 max. So should be okay to override line 6, right?
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7 Replies 7
TaxGuyBill
Level 14

Is Line 1 checked for Family Coverage?  I would think that would populate the correct amount on Line 6.

Yes, you need to do whatever is needed to get Line 6 to show the proper amount.  But the program should have a way to have it populate the correct number without you using overrides.

qbteachmt
Level 15

What does this mean: "My research - no IRS limit for a separate return"

Of course there is a limit. If this person has no policy, they are not entitled to an HSA contribution deduction and any contribution made into the other's HSA account is from the spouse that has the coverage, and that would be an allocation from that spouse's limit.

"So should be okay to override line 6, right?"

Did you mark the Right Return as the person having the Policy? One Family, one not at all.

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gregandrews
Level 1

Sorry, I misspoke saying "no limit." I meant that there is nothing different - no special limitation that applies to MFS (separate) returns. So a taxpayer who qualifies to take $7100 for family coverage on a Joint return can use that same limit if the taxpayer files separately.  Of course the other spouse could not claim any deduction (or exemption) on form 8889 for an HSA.

The reason I ask is that when I copied the joint return data and changed/removed items to make it a separate return, ProConnect cut the $7100 amount which was on the MFJ return by 1/2 to $3550.  I changed it back (override) and no errors appear, but wanted to ask if the community agrees that it's acceptable to do this.

I think the consensus is "yes."

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qbteachmt
Level 15

"but wanted to ask if the community agrees that it's acceptable to do this.

I think the consensus is "yes.""

I think the consensus was: Did you mark that the taxpayer has Family Coverage for the Qualifying plan? That selection should take care of the Function.

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gregandrews
Level 1

Just checked again by removing the line 6 override. When I remove the override, line 6 reverts to $3,550 even though family coverage has been chosen and line 5 shows $7,100 as it should. So the default doesn't work to generate the married limit ($7,100) on line 6 (form 8889) even though "family" is checked at the top of the form and $7100 is shown on line 5.

Line 6 defaults to $3,550 even though line 5 is $7,100. The over-contribution then generates form 5329 and a 6% penalty on the excess contribution over $3550.

Note this is a Married Filing Separate issue. If MFJ was used, the default becomes $7100 and there's no problem.

I'm wanted to check with the community to see if $7100 is allowed on line 6 in this situation.

I'll have to say your answer is incorrect unless there's another way to do it that doesn't require entering data in the override field for line 6.

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qbteachmt
Level 15

"doesn't work to generate the married limit ($7,100)" Hmmm...

There is no Married Limit. It's an issue of Plan Coverage. A Single-person with a child can have a Family Plan. A Married Person can have a Single Plan.

Are you trying to get "single x 2" for a Married person, or does your taxpayer who is MFS have a Family Plan insurance policy that also is High Deductible coverage?

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gregandrews
Level 1

Thanks for quick reply.

To use your words - yes - this is the situation:

"taxpayer who is MFS have a Family Plan insurance policy that also is High Deductible coverage?"

And yes, the max is tied to the type of coverage, and $7100 would be the limit for "MFS" here if that's the only issue - the taxpayer covers the whole family - spouse and 2 kids. Spouse is unemployed, or had a job that didn't offer coverage.

 

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