Hsa question

[JenMO]

Client has HSA thru work, 2 employers contributed $3400, client contributed another $2500. I'm not sure if he has a self-only plan or a family plan. As I work thru the 8889, if self only, the $2500 is not deductible. but if family plan it is. HSA custodian accepted the $2500, and then distributed it for medical expenses. Should this tell me it was a family plan?
Does the custodian keep track of contributions so they don't go over the limit, or is that the responsibility of the taxpayer?

[bgiez]

Client has HSA thru work, 2 employers contributed $3400, client contributed another $2500. I'm not sure if he has a self-only plan or a family plan. As I work thru the 8889, if self only, the $2500 is not deductible. but if family plan it is. HSA custodian accepted the $2500, and then distributed it for medical expenses. Should this tell me it was a family plan?
Does the custodian keep track of contributions so they don't go over the limit, or is that the responsibility of the taxpayer?

I don't think the custodian of the HSA has any clue whether it is a family insurance plan or not. The client, or the employer if the employer sponsors &/or pays for the plan, should know if the insurance plan covers more than the individual. If it does, then it's a family plan.

Limits are $3250 ($4250 if 55+) for an individual plan and $6450 ($7450 if policy holder is 55+) for a family plan. The w2 amount will include both employer's contribution and employee's payroll deduction contributions, and are reported on the 8889 as if all made by the employer. Make sure you understand how the client's $2500 contribution was made - through payroll deduction (then included on w2 and not deductible on the 1040) or with after tax dollars (and therefore a deduction on page 1 of the 1040.

I don't know that the custodian keeps track to make sure that they don't go over the limit. The custodian would have to know about the insurance plan (family or individual) and the HSA owner's age (which they might know.) From my experience with my own HSA, my custodian would not know what my limit would be.

[ruthc]

Custodian doesn"t know.

I spoke to the custodian of a client that went way over the contribution and I was told by the custodian that they don't keep track of these things. They don't keep track of when the person turns 65 or any other age. It is up to the employee to make sure they understand the rules and they must report to the custodian any changes. Maybe other custodians do keep track, but I doubt it. They usually have too many clients to track these things.

[ATSMAN]

All the custodian does is holds the money and disburses when requested and issues the tax forms. The employer's benefit person will know, if the taxpayer does not.