HSA last-month rule and the testing period
See when December 1 eligibility can unlock a full-year limit and when losing eligibility creates income plus a 10% additional tax.
If you are HSA-eligible on December 1, the last-month rule may allow the full annual limit based on December coverage. You generally must remain eligible through December 31 of the following year or include the extra amount in income and pay a 10% additional tax.
Compare two limits
The normal method adds one-twelfth of the annual limit for each eligible month. The last-month method uses the full annual limit for the coverage in force on December 1. It matters only when the full-year amount exceeds the ordinary monthly total.
The testing period is longer than one calendar year
For a taxpayer using the rule in 2026, the testing period runs from December 1, 2026 through December 31, 2027. Losing eligibility during that period generally triggers the recapture rule unless a statutory exception applies, such as death or disability.
A planning result, not an automatic election
The calculator displays both the prorated amount and the last-month amount. Use the larger amount only after confirming that December 1 eligibility exists and that maintaining eligibility through the testing period is realistic.