If you’re only HSA-eligible for part of the year, your contribution limit may need to be prorated to avoid a 6% penalty. This usually applies when your eligibility ends before December 1. However, if your eligibility begins later in the year and you’re covered by an HSA-qualified plan on December 1, you may be able to use the “last month rule” to contribute the full annual amount. Just keep in mind: to avoid taxes and a 10% penalty, you’ll need to remain HSA-eligible for the entire following calendar year.
