We both had individual HSAs starting this year (the first year our company offered it), governed by individual contribution limits.
And in order for both of you to make additional $1000 contributions for being over 55 by the end of the year, you will need to keep your individual accounts. Those $1000 additional contributions are required to be made to each individual’s account.
My wife retired in April. After that, she was covered by me. I retired 7/1. So how do the limits work this year? Family limits apply after April when she retired. I know that in 2023 we will be limited to the family limit between both accounts (i.e. add up the contributions to both accounts, they must not exceed family limits). But how would we prorate the contribution limits this year? I assume the IRS has a picky way to do that. Maybe Jan-Mar we had the individual limits (divided by four, since that is one quarter), and then April-Dec will be governed by 3/4 family limits??
When a husband and wife are both covered by family limits, the total contribution limit between their HSAs is limited to the family contribution amount. From IRS Pub 969 https://www.irs.gov/pub/irs-pdf/p969.pdf
Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2021 is $7,200. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses’ Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division.
The rules for married people apply only if both spouses are eligible individuals.
If both spouses are 55 or older and not enrolled in Medicare, each spouse’s contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage can’t be more than $9,200. Each spouse must make the additional contribution to his or her own HSA.
Since for 2022, the family contribution limit is $7,300, which is exactly twice the individual limit of $3,650, you don’t need to worry about pro-rating by coverage months - the combined contribution that you can split any way between the two accounts is $7,300, in addition to the $1,000 you can each put into your individual accounts if you will each be 55 or older by the end of 2022. Thus,if you are both 55 or older, you can put a total of $9,300 into the two accounts, provided at least $1,000 goes into each account.
I would also point out the pro-ration for HSA contributions is done by months, not quarters, and it’s done by your status on the first day of the month. So if your wife was still covered by individual coverage on April 1, 2022, you and she would each have 4 months of individual coverage and 8 months of family coverage.
AJ