Share the love - how mid-year weddings affect HSA contributions

It's Valentine's Day and love is in the air! The "season of love" sounds like a metaphor, but it's actually a concrete time period. Almost half of all married couples get engaged between Thanksgiving and Valentine's Day, and most weddings take place between June and September

But while mid-year weddings are ideal weather-wise, mid-year marital status changes add a layer of complexity to your HSA situation. Read on for some things you might want to know about life-changing events.

The bigger picture...

If you have an HSA-eligible HDHP, get married in the middle of the year and your spouse joins your health plan, you'll be able to contribute the family contribution limit of $8,300 instead of the individual limit of $4,150 (2024). This also applies if your new spouse has their own high-deductible plan with an HSA.

This means you'll be able to get a bigger tax break, because you can contribute twice as much to your HSA and then deduct those contributions. The contribution limits change every year, so make sure you're always putting away as much as you can.

How married couples can contribute to an HSA

Unlike a bank account, there's only one owner of an HSA. You and your spouse can each open your own or both make contributions into the single account.. If you have two accounts, you can divide contributions in a few different ways. One person can contribute all of the limit in his or her account and you can divide it 50/50 or split it by any other percentage. The IRS doesn't care which method you choose.

Be sure to track how much you're each contributing to the HSA. If you go over the contribution limit, you'll pay a 6% fee on the excess. Some HSA providers will visibly show how much you've contributed already, while others make you do the math yourself. You can simplify the process by automating your HSA contributions on a monthly basis so you never add more than the limit.

Account holders can add an extra $1,000 per year if you're an account holder 55 or older, because it counts as a catch-up contribution. This bonus is available every year they have an HSA-eligible insurance plan. Once they switch to Medicare, they'll no longer be able to contribute to an HSA and you'll have to go back down to the individual limit.

Any money saved in an HSA before you got married or before your spouse joined the HSA plan can be used on their eligible expenses.

If your spouse leaves your plan...

If your relationship status changes from married to single or if your spouse loses his or her coverage under the qualified health plan, your contribution limit then changes based on when the coverage changed.

Let's say you and your husband are on the same insurance plan when the new year begins, but in August he gets a new job and switches to a non-HSA plan. Your annual contribution limit now changes, and you have to determine the new total contribution limit.

We're not tax or financial advisers and you would want to get some advice from a professional when figuring this all out. However you would typically take the annual contribution max, divide it by 12 and multiply that figure by how many months you both carried an HSA. The family annual contribution limit in 2024 is $8,300, so your new total limit would be $4,841.66 (based on 7 months of participating in the health plan as a family).

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