Contribution limits and deadlines for HSA clarification

Question

Taken from here.

Partial Year Contributions If you establish an HSA by at least December of any year, your maximum contribution is the maximum amount (described above) for that calendar year. However, if you choose to discontinue the qualified plan any time in the next 12 month period, the maximum contribution will be prorated for the number of full months in which the qualified plan was in force. You will be charged tax on the funds that exceed the maximum, as well as a ten percent tax penalty.

Contribution Deadlines HSA contributions must be made for a specific year on or before the due date (without extensions) for filing tax returns for that year. So contributions must be made on or before April 15th or the date you file your taxes, whichever comes first.

If I open an HSA after Dec. 31, 2018, any contribution (in 2019) goes toward the 2019 contribution limit? But the contributions made during Jan. - April 15, 2019 can be deducted from my 2018 gross income?

Answer 1

Since you were HSA-eligible for 3 months in 2018, you are allowed to make an HSA contribution for tax year 2018. There are two ways to calculate your 2018 contribution limit: you can either use a prorated limit (3/12 of the standard limit), or you can use the last-month rule to contribute the full amount for 2018. See this answer for more information on what your HSA contribution limit is during a partial year.

You have until April 15, 2019 to make 2018 tax year contributions to your HSA. However, since you have not yet established an HSA, you may find that whatever financial institution you end up using for your HSA will not want to accept a prior year contribution for a tax year that you did not have an account with them. You'll need to ask the financial institution if they will allow you to make a 2018 HSA contribution if you don't open the account until 2019.

If and when you do make a prior year contribution during the months of January-April, you need to inform the financial institution and explicitly designate the contribution as a prior year contribution. They need to know which year the contribution is for, and it isn't automatic.