Can my spouse contribute to an HSA if I am on Medicare?
Asked by: Prof. Javonte Armstrong IV | Last update: February 3, 2024Score: 4.6/5 (22 votes)
Your spouse being on Medicare does not disqualify you from continuing contributions to the HSA up to the family limit, even if they are also covered by the HDHP.
Can I contribute to my HSA if my spouse is on Medicare?
Yes, being eligible to contribute to the HSA is determined by the status of the HSA account holder not the dependents of the account holder. Your spouse being on Medicare does not disqualify you from continuing contributions to the HSA up to the family limit, even if they are also covered by the HDHP.
Can an employer contribute to an HSA for someone on Medicare?
If you haven't yet enrolled in Medicare and have an HSA-eligible insurance policy, you can contribute at any time. However, after you sign up for Medicare, you can't make new contributions nor can your employer add to your HSA.
What is the penalty for contributing to an HSA while on Medicare?
Your contributions after you're enrolled in Medicare might be considered “excess” by the IRS. Excess contributions will be taxed an additional 6% when you withdraw them. You'll pay back taxes plus an additional 10% tax if you enroll in Medicare during your HSA testing period.
Does my spouse have to be on my health insurance to use my HSA?
You definitely can, even if your spouse doesn't have an HSA or a HDHP. You can also use your HSA funds to pay for the medical expenses of any dependent children claimed on your income tax return. This is true even if your spouse has individual-only coverage under a traditional medical plan.
Can an Employee Contribute to an HSA if Their Spouse Has an FSA?
Who Cannot contribute to HSA?
An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses can't generally make contributions to an HSA.
Can my spouse use my HSA in retirement?
Your spouse: Your HSA transfers to your spouse along with all its tax benefits, meaning your spouse can continue to take tax-free withdrawals from the account to pay for health care expenses. Someone other than your spouse: They receive the balance of your account, which is taxable the year you pass away.
Can you contribute to an HSA in the year you turn 65?
If you are not enrolled in Medicare and are otherwise HSA eligible, you can continue to contribute to an HSA after age 65. You are also allowed to contribute the $1,000 catch-up. If you signed up for Medicare Part A and now want to decline it, you can do so by contacting the Social Security Administration.
What is the HSA reimbursement loophole?
Again, you don't have to reimburse yourself for those medical expenses in the same year, or the same plan year that you incur those medical expenses. If you incur that medical expense, you can just write it down. And then you can reimburse yourself from the HSA at a later date.
When should I stop contributing to my HSA?
- Your financial situation has changed. ...
- You're getting close to age 65 or you're no longer eligible. ...
- You've hit the max contribution limit.
Can you contribute to an HSA if you are no longer employed?
As long as you are eligible to contribute to the HSA, you can continue to fund it even after your employment ends with your current employer.
Does HSA affect Social Security?
HSAs can reduce taxable income in retirement, which may affect Medicare premiums and the portion of Social Security benefits subject to federal income tax.
Does IRS check HSA reimbursement?
Verification of expenses is not required for HSAs. However, total withdrawals from your HSA are reported to the IRS on Form 1099-SA. You are responsible for reporting qualified and non-qualified withdrawals when completing your taxes.
Can I use HSA for dental?
You can also use HSAs to help pay for dental care. While dental insurance can help cover costs, an HSA can also help cover any out-of-pocket expenses resulting from dental care and procedures.
What happens to leftover HSA money?
No. HSA money is yours to keep. Unlike a flexible spending account (FSA), unused money in your HSA isn't forfeited at the end of the year; it continues to grow, tax-deferred.
What is the 6 month rule for Medicare and HSA?
Under current regulations, individuals who apply for Medicare Part A or Part B after reaching age 65 are automatically given six months of retroactive health coverage, which invalidates their ability to make or receive HSA contributions for any of those months they were deemed to be covered.
How much should I have in my HSA at 65?
According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2022 may need approximately $315,000 saved (after tax) to cover health care expenses in retirement. Even if you don't have an HSA, it may be prudent to set aside certain assets just to pay for health care.
What happens when an HSA holder who is 65 years old decides to use the money in the account?
Once you are 65, you can withdraw funds for any reason without paying a penalty, but they will be subject to ordinary income tax. For any reason, but if you are under age 65 and use your HSA funds for nonqualified expenses, you will need to pay taxes on the money you withdraw, as well as an additional 20% penalty.
Can I use my HSA for glasses?
Yes! You can definitely use funds from your flexible spending account (FSA) or health savings account (HSA) to purchase prescription glasses. (FSAs and HSAs can be used for many other vision- and eye health-related expenses, too, but we'll discuss that more in a bit.)
How much can a married couple contribute to HSA?
The IRS treats married couples as a single tax unit, which means you must share one family HSA contribution limit of $7,300, or $7,750 in 2023. If you and your spouse have self-only coverage, you may each contribute up to $3,650, or $3,850 in 2023, annually into your separate accounts.
Can both spouses contribute an extra $1000 to HSA?
SPECIAL RULE FOR SPOUSES
It does not apply to catch-up contributions. Married couples who both are over age 55 may each make an additional $1,000 contribution to their separate HSAs.
Can I contribute to an HSA if I have no income?
Earned income isn't a requirement to save in an HSA, but you do need an eligible high-deductible health insurance policy and you can't be enrolled in Medicare. I'm 58 and retired and buy my own health insurance. Can I contribute to a health savings account even though I don't have any earned income? Yes.
Can I contribute to HSA if I don't have insurance?
While you can use the funds in an HSA at any time to pay for qualified medical expenses, you may contribute to an HSA only if you have a High Deductible Health Plan (HDHP) — generally a health plan (including a Marketplace plan) that only covers preventive services before the deductible.
Do I have to report HSA withdrawals on my tax return?
If you (or your spouse, if filing jointly) received HSA distributions in 2022, you must file Form 8889 with Form 1040, Form 1040-SR, or Form 1040-NR, even if you have no taxable income or any other reason for filing Form 1040, Form 1040-SR, or Form 1040-NR.
Do they audit your HSA?
It is important to keep the receipts to prove that the payment was indeed for a qualified medical expense in case of an audit. HSA spending may be subject to IRS audit. Even if HSA funds were used for qualified medical expenses, the IRS may ask for proof that the funds were spent correctly.