In IRS Publication 969, the IRS defines the “Last Month Rule.” According to this, if you have an HDHP on the first day of the last month of your tax year (December 1 for most tax payers), you can contribute up to the maximum HSA contribution for that year based on your coverage type (individual or family) regardless of when your HSA is open. An important thing to note is that you may face penalties if you don’t remain enrolled in an HDHP during what’s referred to as the “testing period.” For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month (for example, December 1, 2016, through December 31, 2017). You can read more about this here.
Articles in this section
- What is an HSA?
- How Does an HSA Work?
- What are the benefits of an HSA?
- What are the requirements of an HSA? Am I eligible?
- What designates a qualifying High Deductible Health Plan?
- Do I have to get an HSA if I am on a High Deductible Health Plan?
- How does money get into my HSA account?
- How can I get an HSA?
- If I have a family, can I still have an HSA?
- Can I have a joint-HSA with my spouse?