But your previous employer offered an HDHP, and you stashed away some money in an HSA while you worked there. You can't contribute any more money to your HSA, unless you switch to another qualified HDHP. Your parents are enrolled in Medicare, your daughter is covered under your ex's health plan, and you have a non-HDHP plan through your current employer. Your elderly parents live with you and you claim them as qualifying relative dependents. You and your ex divorced a few years ago, and your ex, who has primary custody, claims your daughter as a tax dependent. She would then be able to withdraw funds from her own HSA to cover her own medical expenses.ĭivorced mom who supports elderly parents and does not have custody of her daughter (She would not be able to contribute to her own HSA if she were still your tax dependent.) She can contribute the full $7,500 to her HSA, since she's covered under a family HDHP.Īnd if you want, you can make contributions to her HSA on her behalf. It's also worth noting that your daughter can open her own HSA, since she's covered by your HDHP, but files her own taxes. This is a good example of how the tax rules (which pertain to HSA contributions and withdrawals) are separate from the insurance rules (which pertain to who is allowed to be covered under your plan). You can't use it to pay for your daughter's care, because you can't claim her as a tax dependent. But you can only use your HSA funds to pay for your own medical care and your husband's. You're allowed to contribute the full family amount to your HSA, because your HDHP is covering both yourself and your daughter. You've got an HDHP through your employer, which covers you and your daughter. You've kept your daughter on your health insurance, because the coverage that her employer offers is more expensive. You're 60, your husband is 66, and you've got a 25-year-old daughter. Spouse on Medicare, young adult child on parent's HDHP It doesn't matter whether the person was covered under your HDHP, or even whether they had health coverage at all. Anyone you could have claimed as a dependent, but weren't able to because he or she filed a joint tax return (for example, your married teenage kid who files a joint return with his or her spouse) earned more than $4,400 (in 2022), or you (or your spouse, if you file jointly) could be claimed as a dependent on someone else's tax returnĪs long as the person is in one of the above categories, you can reimburse yourself for the cost of their qualified medical expenses with tax-free money from your HSA.Any HSA eligible dependents you claim on your tax return (your children, or a qualifying relative dependent) and any children who are claimed on your ex-spouse's tax return.Your spouse (regardless of whether you file taxes jointly or separately).In Publication 969, the IRS clarifies that you can withdraw tax-free money from your HSA to pay for qualified medical expenses for: They don't have to be covered under the same health insurance policy you have, and in some cases you can't use your HSA funds to pay for medical care for a person who is covered under your policy. If you choose to use your funds to cover qualified healthcare costs, you might be a little fuzzy on whose medical care you can pay for with tax-free HSA money. Ultimately, it’s your call as to whether you choose to withdraw funds to spend on eligible health essentials, or have funds roll over, from one year to the next. With HSA’s triple-tax benefit, there are countless ways that you can use, or not use, your pre-tax funds: to supplement out-of-pocket expenses, use it as an emergency fund, reduce taxable income, or invest and grow as an extra retirement account. You can make tax-free HSA contributions as long as you have coverage under a qualified high deductible health plan (HDHP). You already know that a health savings account (HSA) is a great way to save for future healthcare costs.
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