The HSA Last-Month Rule and Testing Period

If you are eligible on December 1 you are treated as eligible all year. The catch: you must stay eligible through December 31 of the next year (the testing period). If you don't, the extra contribution becomes taxable income plus a 10% additional tax on Form 8889 Part III (Form 8889 instructions).

Last reviewed 2026-10-29. General information, not tax advice. Form 8889, its instructions, Pub. 969 and a tax professional come first.