Health Savings Account - Enrolled in Medicare
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The amount you can contribute to an HSA is limited to zero for any month you are enrolled in Medicare.  Below is some general information followed by the navigation steps to enter HSA contribution amounts in the program.

Per IRS Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans:

Page 3: Qualifying for an HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements.

  • You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
  • You have no other health coverage except what is permitted under Other health coverage, later.
  • You aren't enrolled in Medicare.
  • You can't be claimed as a dependent on someone else's 2019 tax return. 

Page 7: Enrolled in Medicare. Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. This rule applies to periods of retroactive Medicare coverage. So, if you delayed applying for Medicare and later your enrollment is backdated, any contributions to your HSA made during the period of retroactive coverage are considered excess. See Excess contributions, later.

Example. You turned age 65 in July 2019 and enrolled in Medicare. You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. Your contribution limit is $2,250 ($4,500 × 6 ÷ 12). 

As outlined below, according to the Internal Revenue Code (IRC), if the contributions were pre-tax (either made by employer or employee through a cafeteria plan), then a new corrected Form W-2 should be issued so those contributions are reverted back into wages and appropriately assessed income and FICA taxes.

IRC Section 223 Health Savings Accounts:

(f) Tax treatment of distributions

(3) Excess contributions returned before due date of return

(A) In general

If any  excess contribution is contributed for a taxable year to any health savings account of an individual, paragraph (2) shall not apply to distributions from the health savings accounts of such individual (to the extent such distributions do not exceed the aggregate excess contributions to all such accounts of such individual for such year) if-

(i) such distribution is received by the individual on or before the last day prescribed by law (including extensions of time) for filing such individual's return for such taxable year, and

(ii) such distribution is accompanied by the amount of net income attributable to such excess contribution.

Any net income described in clause (ii) shall be included in the gross income of the individual for the taxable year in which it is received

To enter or review HSA contribution information into the TaxAct program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
  2. Click Health Savings Accounts (HSA)  in the Federal Quick Q&A Topics menu to expand the category and then click HSA Contributions
  3. The program will proceed with the interview questions for you to enter the appropriate information.