1040-US: Limitation calculation for HSA and Archer MSA contributions with multiple accounts

Alerts and notices


How does the tax application calculate the limitation for HSA and Archer MSA deductible contributions on Forms 8889 and 8853 calculate when there is more than one account?


The instructions for Form 8889 and 8853 state that for married taxpayers, if one taxpayer has a high deductible health plan with family coverage, all other plans are disregarded. If both taxpayer and spouse have high deductible health plans with family coverage, the plan with the higher deductible is disregarded. In the case of an Archer MSA, the deductible is multiplied by 65 percent for a plan with self-only coverage, or 75 percent for a plan with family coverage, to determine the yearly limit. Further limitations apply if the coverage was for less than a full year.

The family coverage limit is then divided between the taxpayer and spouse. If a taxpayer has more than one HSA or Archer MSA account, the contribution limit is divided between accounts. The tax application assumes an even division between taxpayer and spouse, or between a taxpayer's accounts. If there are multiple HSA or Archer MSA accounts to which contributions are made, please review the limitation on Form 8889, line 6 or Form 8853, line 3 to ensure the correct limitations are applied. There is a field for HSA/MSA limitation (Force) on Screen 5498SA and also one for Form 8889, line 6 (Force) to allow for different allocations of deductible contributions. See IRS Notice 2008-59 for examples of HSA contribution limitations and IRS Pub. 969 for examples of MSA contribution limitations.

Related topic: Medical and health savings accounts FAQs (1040)