Uncomplicating the Complicated: HSA Contributions
By Ben Maas, CIS, CIP, CISP
We have a client who was HSA-eligible from January through June 2025. He hasn’t yet made a 2025 HSA contribution. Can he still make an HSA contribution now that he is no longer HSA-eligible?
Yes. He is still allowed to make a 2025 contribution for the months for which he was HSA-eligible (January through June). He has until his tax return deadline (generally April 15, 2026) to do so.
Our clients are married, filing jointly. One spouse has a family HDHP that covers both spouses, and the other spouse has a self-only HDHP. How much are they allowed to contribute to their HSAs?
According to Notice 2004-33, Q & A 31, they may contribute, in total, up to the maximum annual contribution amount for family coverage ($8,750 for 2026). They may divide this maximum amount however they choose between their HSAs (e.g., $4,375 into each HSA, or all in one HSA). And if they each attain age 55 or older by the end of the tax year, they may each make an additional $1,000 catch-up contribution to their own HSA.
One of our clients will be enrolling in Medicare on June 1 of this year. His spouse, age 60, is still working, and plans to maintain family HDHP coverage through this year and possibly beyond. Is she allowed to contribute the family HSA contribution limit to her own HSA even if her husband will no longer be HSA-eligible because of Medicare enrollment?
Yes. Because the spouse is covered by the family HDHP, she is allowed to contribute up to the family contribution limit, plus the catch-up contribution, to her HSA. This means she can contribute $9,750 ($8,750 plus $1,000 catch-up contribution) to her HSA. Also, assuming she contributes the maximum amount, her husband may still prorate his own catch-up contribution limit for the months for which he is eligible (January through May) and contribute $416.65 ($83.33 x 5) to his own HSA.
My client wants to move some of her Traditional IRA assets into her HSA. Is that possible?
Yes. Individuals may take a one-time “qualified HSA funding distribution” from a Traditional or Roth IRA and directly move it to an HSA. The distribution amount is restricted to the annual HSA contribution limit, and such transactions reduce any regular annual contributions to the HSA for the year. If individuals do not remain HSA-eligible (for reasons other than death or disability) for 12 months following the month of the transaction, they must include the amount in their taxable income and pay a 10 percent penalty tax.
