How is my contribution limit determined if I am not covered for a full year under the high-deductible health savings plan?

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How is my contribution limit determined if I am not covered for a full year under the high-deductible health savings plan?

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Two different methods are used to determine your contribution limit for a given year. The first method is pro-rata. The second method is an exception to the pro rata rule and allows the HSA owner to make a full year’s contribution even though he or she was only eligible for part of the year.

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An individual’s maximum HSA contribution for 2011 is the greater of the following: 1. The sum of the individual’s monthly contribution limits determined separately for each month, based on the eligibility and health plan coverage as of the first day of the month plus the sum of the monthly catch up amounts, or 2. The maximum annual contribution is based on the individual’s HDHP coverage (self-only or family) on December 1 plus catch-up contributions, if applicable. The individual is treated as if he or she had such coverage for the full year. Actually, the maximum annual contribution is based on the individual’s HDHP coverage as of the first day of the last month of the individual’s tax year. Since most taxpayers have a calendar year tax year, the determination date is December 1. This special rule is called the full contribution rule. Note that the full contribution rule applies only if the individual has HDHP coverage as of December 1. This full contribution rule applies without rega

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