HSA for a child

[LCP]

I seem to recall a discussion in which it was determined that a child covered under the parents' high deductible health plan was eligible for his own HSA account. I don't recall how the limitation on contributions worked. I could be totally wrong too.

Here's the exact situation..... child graduated and will file on his own claiming his own exemption. Child has his own high deductible health coverage starting in July. Is the maximum 2012 contribution limited to six months...... or does coverage under the parent's plan for the first half of the year allow him to make a full-year contribution?

[Roland Slugg]

Based on the facts in your post, he is qualified for the entire year. The key is that he is no longer eligible to be claimed as a dependent on his parents' tax return.

See F-8889 and related instructions. Everything is explained pretty well, and there is a helpful flow chart. If he was covered by an HDHP all year, he should qualify for a deduction of $3,100 for 2012.

IMO I think HSAs are a much overlooked tax benefit and deduction. They serve, in essence, to convert medical expenses from a deduction on Schedule A, where many taxpayers don't get a benefit from them, into a deduction in arriving at AGI (like an IRA deduction) which all taxpayers can use.

[awesome]

Hsa

I seem to recall a discussion in which it was determined that a child covered under the parents' high deductible health plan was eligible for his own HSA account. I don't recall how the limitation on contributions worked. I could be totally wrong too.

Here's the exact situation..... child graduated and will file on his own claiming his own exemption. Child has his own high deductible health coverage starting in July. Is the maximum 2012 contribution limited to six months...... or does coverage under the parent's plan for the first half of the year allow him to make a full-year contribution?

Does HSA was paid by pre-tax dollars?

[LCP]

Based on the facts in your post, he is qualified for the entire year. The key is that he is no longer eligible to be claimed as a dependent on his parents' tax return.

See F-8889 and related instructions. Everything is explained pretty well, and there is a helpful flow chart. If he was covered by an HDHP all year, he should qualify for a deduction of $3,100 for 2012.

IMO I think HSAs are a much overlooked tax benefit and deduction. They serve, in essence, to convert medical expenses from a deduction on Schedule A, where many taxpayers don't get a benefit from them, into a deduction in arriving at AGI (like an IRA deduction) which all taxpayers can use.

You got that right!! Other great features .....

1. You have till 4/15 to fully fund it
2. You can maintain the money in the account for years and use it to pay qualifying expenses that are incurred in those golden years
3. You can move it over to an IRA in the future such that at the very worst (ie you never have enough expenses) it was an additional retirement plan contribution when you made it

[LCP]

Based on the facts in your post, he is qualified for the entire year. The key is that he is no longer eligible to be claimed as a dependent on his parents' tax return.

See F-8889 and related instructions. Everything is explained pretty well, and there is a helpful flow chart. If he was covered by an HDHP all year, he should qualify for a deduction of $3,100 for 2012.

IMO I think HSAs are a much overlooked tax benefit and deduction. They serve, in essence, to convert medical expenses from a deduction on Schedule A, where many taxpayers don't get a benefit from them, into a deduction in arriving at AGI (like an IRA deduction) which all taxpayers can use.

How about this scenario ..... child was covered under the parents HDHP during the first part of the year. He graduates, get's a high paying job and claims himself for 2012. Could he set up an HSA (based on the number of months on his parent
's plan) regardless of his current coverage?