December 1 Eligibility Fills the 2026 HSA Limit and Starts a 13-Month Clock

One Month of Eligibility, Counted as Twelve

Health Savings Account contribution limits are normally earned month by month: a person who becomes eligible partway through the year gets a partial limit, computed from the months of eligibility rather than the full annual figure. One exception written into the rules is unusually generous on its face — a person eligible on a single day near the end of the year can be treated as eligible for the whole of it.

The IRS states the exception in IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans in one sentence: "Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year." The current revision of Publication 969 is written for the 2025 tax year, so the dollar amounts printed inside it are 2025 amounts. The structure of the rule, however, does not change with the calendar.

The dollar figures that go with the 2026 tax year come from a different document. In IRS Revenue Procedure 2025-19, the IRS set the 2026 annual contribution limitation under §223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan at $4,400, and the limitation under §223(b)(2)(B) for family coverage at $8,750. The same revenue procedure states that it "is effective for HSAs for calendar year 2026." For a person who is eligible only on December 1, 2026, the last-month rule is what turns a single eligible month into permission to contribute the entire $4,400 or $8,750 for that year.

Revenue Procedure 2025-19 also fixes what counts as a high deductible health plan for 2026. The IRS describes it as "a health plan with an annual deductible that is not less than $1,700 for self-only coverage or $3,400 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,500 for self-only coverage or $17,000 for family coverage." Eligibility on December 1, 2026 means being covered by a plan meeting those thresholds on that date.

The Thirteen Months That Come Attached

The full-year treatment is conditional, and the condition outlasts the tax year it applies to. Publication 969 defines the condition this way: "If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month (for example, December 1, 2025, through December 31, 2026)."

The example dates in that sentence are the IRS example, drawn from the 2025 revision of the publication. Applying the same definition to the 2026 tax year moves the window forward by a year: it begins December 1, 2026 and ends December 31, 2027. That is thirteen calendar months, or 396 days — longer than a rule described as covering twelve months suggests. The twelve months are counted after the month the period begins with, which is why a decision made in December 2026 is still being tested at the end of 2027.

A full-year contribution claimed for 2026 is therefore not settled when the 2026 return is filed. It is settled a year later. A change in coverage during 2027 — a switch to a plan that is not a high deductible health plan, enrollment in Medicare, or becoming a dependent on someone else's return — reaches backwards into the 2026 contribution.

How the Limit Would Have Been Computed Without the Rule

To see what the last-month rule is worth, the ordinary computation has to be in view. The IRS describes it as a monthly build-up. The IRS Instructions for Form 8889, Health Savings Accounts (HSAs) set out a limitation worksheet for line 3 that works through each month of the year and then, in the IRS's words, instructs the filer to "Add them all together and divide by 12 to receive the limitation amount to be entered on line 3."

For 2026, each eligible month of self-only coverage is worth $4,400 divided by 12. Carried to the cent, that is $366.67. Each eligible month of family coverage is $8,750 divided by 12, or $729.17. Those two figures are computed here from the annual limits published in Revenue Procedure 2025-19; the IRS publishes the annual amounts and the procedure for dividing them, but does not publish the monthly quotients.

Neither quotient is exact, and multiplying the rounded value back out produces a different answer than the rule does. Eleven months of self-only coverage at the rounded $366.67 comes to $4,033.37; the same eleven months computed from $4,400 directly comes to $4,033.33. Every derived amount below is computed from the published annual limit, not from a rounded monthly figure.

What Breaking the Testing Period Costs in 2026 Terms

Publication 969 states the consequence of failure without softening it, and the exception is inside the same sentence: "If you fail to remain an eligible individual during the testing period, for reasons other than death or becoming disabled, you will have to include in income the total contributions made to your HSA that wouldn't have been made except for the last-month rule." The publication adds that "this amount is also subject to a 10% additional tax."

The amount that "wouldn't have been made except for the last-month rule" is the difference between what was contributed and what the month-by-month computation would have allowed. The IRS gives the definition; it does not give the dollar figures for any particular case. The table below applies the definition to 2026 amounts. Every row assumes eligibility beginning December 1, 2026, a contribution of the full annual limit for 2026, and a failure during the testing period for a reason other than death or disability.

Coverage in 2026	Contributed	Month-by-month limit (1 month)	Included in income	10% additional tax
Self-only	$4,400	$366.67	$4,033.33	$403.33
Family	$8,750	$729.17	$8,020.83	$802.08
Self-only, age 55 or older	$5,400	$450.00	$4,950.00	$495.00
Family, age 55 or older	$9,750	$812.50	$8,937.50	$893.75

The age 55 rows use the additional contribution amount described in Publication 969: "If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000." That $1,000 is not a separate pot sitting outside the last-month rule. It is added to the annual limitation first, and the combined figure is what gets divided by twelve. For self-only coverage in 2026 the combined limit is $5,400, which divides evenly into $450.00 per month; for family coverage it is $9,750, or $812.50 per month. Because both divide without remainder, the rounding caution above does not bite in these two rows — but the exposure grows, since the catch-up amount is part of what the last-month rule made possible.

The rule is not limited to people eligible only in December; it applies to anyone eligible on December 1, however many earlier months they also qualified for. The more months of genuine eligibility a person already has, the smaller the portion of the contribution that depends on the rule, and the smaller the amount at risk. Self-only coverage running September 1 through December 31, 2026 is four eligible months: a month-by-month limit of $1,466.67, $2,933.33 at risk on a full $4,400 contribution, and $293.33 of additional tax. Family coverage from July 1, 2026 is six months, a limit of $4,375.00, and exactly half the $8,750 at risk, carrying $437.50 of additional tax.

The Exception Written Into the Same Sentence

The phrase "for reasons other than death or becoming disabled" sits in the middle of the IRS sentence describing the penalty, and it reverses the outcome for the cases it covers. A testing period that ends because the account holder died, or because the account holder became disabled, does not trigger the income inclusion or the 10% additional tax. Quoting the consequence while stopping before that clause states the rule incorrectly, because the clause is what determines whether the rest of the sentence applies at all.

The rule does not ask whether a lapse was voluntary or planned. Losing eligibility because a job ended, because an employer changed plans, or because Medicare enrollment began does not fall under the exception, even though none of those is a choice in any ordinary sense. Publication 969 notes separately that a person enrolled in Medicare cannot contribute starting with the first month of Medicare enrollment, which is the mechanism by which turning 65 during a testing period can end it.

Where the Amounts Land on the Return

The Instructions for Form 8889 place the computation in Part III of the form. The income inclusion is figured on line 18 of Form 8889, captioned "Last-month rule," and carried into income for the year the testing period fails, not the year the contribution was made. The 10% additional tax is reported on Schedule 2 of Form 1040. A failure occurring in 2027 is reported on the 2027 return, even though the contribution it unwinds was a 2026 contribution deducted on a 2026 return. The 2026 return itself is not amended for this.

The Instructions for Form 8889 currently in circulation are, like Publication 969, written for the 2025 tax year. The line structure carries over; the dollar amounts printed there are 2025 amounts, not the 2026 figures used throughout this article.

The chart shows only tax years for which the governing revenue procedure was read directly. Each year's pair of figures comes from its own document: IRS Revenue Procedure 2021-25 for 2022, IRS Revenue Procedure 2022-24 for 2023, IRS Revenue Procedure 2023-23 for 2024, IRS Revenue Procedure 2024-25 for 2025, and Revenue Procedure 2025-19 for 2026.

That series bears on the last-month rule, because the amount at risk in a testing period failure tracks the annual limit. Computed from the IRS figures above, the self-only limitation rose $200 for 2023, $300 for 2024, $150 for 2025, and $100 for 2026 — $750 in total, or about 20.5 percent across the five tax years shown. Family coverage moved $450, $550, $250 and $200 over the same span, totaling $1,450 or roughly 19.9 percent. The two most recent adjustments are the smallest in the series.

Numbers to Re-check

Figure	Tax year used here	Where the IRS states it	When it changes
Self-only contribution limitation, $4,400	2026	Rev. Proc. 2025-19, §223(b)(2)(A)	Annual inflation adjustment, usually announced in May for the following year
Family contribution limitation, $8,750	2026	Rev. Proc. 2025-19, §223(b)(2)(B)	Same annual adjustment
HDHP minimum deductible, $1,700 / $3,400	2026	Rev. Proc. 2025-19, §223(c)(2)(A)	Same annual adjustment
HDHP out-of-pocket maximum, $8,500 / $17,000	2026	Rev. Proc. 2025-19, §223(c)(2)(A)	Same annual adjustment
Age 55 additional contribution, $1,000	Stated in Publication 969 (rev. 2025); applied here to 2026	Publication 969	Set by statute, not indexed for inflation
Additional tax rate, 10%	Rule text, not year-specific	Publication 969, testing period	Changes only by legislation
Testing period, 13 months	Derived for 2026: Dec 1, 2026 – Dec 31, 2027	Publication 969 definition	Definition is stable; the dates move with the tax year
Monthly amounts, $366.67 / $729.17	Derived from the 2026 limits	Not published by the IRS — computed from Rev. Proc. 2025-19	Recomputed each year from the new limits

Two entries deserve emphasis. The monthly amounts and every income-inclusion figure here are derived, not quoted: the IRS publishes the annual limitations and the instruction to divide by twelve, but not the products of that division. And Publication 969 and the Instructions for Form 8889 are revised for the 2025 tax year, while the dollar amounts used here are the 2026 amounts from Revenue Procedure 2025-19. Mixing the two produces figures that belong to no year at all.

Where This Doesn't Apply

The computation above assumes conditions that do not hold for everyone, and several change the answer entirely rather than adjusting it.

• A tax year that is not the calendar year. Publication 969 says "December 1 for most taxpayers" because the rule is written around the first day of the last month of the tax year. A fiscal-year filer applies the rule to a different date, and the testing period shifts with it.
• Marital status and coverage type. The family limitation is a single limitation attached to family coverage, not a per-person amount. Two spouses with family coverage share the $8,750 for 2026 rather than each having it, and how the shared amount is divided between their accounts is a separate determination. The $1,000 age 55 addition, by contrast, is per eligible individual and cannot be contributed to a spouse's account.
• Medicare enrollment. A person enrolled in Medicare is not an eligible individual starting with the first month of enrollment. Turning 65 during 2027 can therefore end a testing period started in December 2026, and it is not one of the two excepted reasons.
• Employer contributions. The limitation covers all contributions to the account, including amounts an employer puts in. A last-month-rule computation that counts only the account holder's own deposits understates what was contributed and therefore understates what is at risk.
• State income tax. Several states do not conform to the federal treatment of HSAs. The income inclusion described here is a federal computation, and the state consequence of the same contribution can differ from it.
• Already fully eligible for the year. The rule has no effect for someone eligible in all twelve months of 2026, because the month-by-month computation already permits the full limit. With nothing contributed "except for the last-month rule," there is nothing for a testing period failure to add back.
• Failure caused by death or disability. Where the testing period ends for either of those reasons, the income inclusion and the 10% additional tax do not apply, and none of the dollar figures in the table above are reached.

What the rule offers and what it asks are best read together. Revenue Procedure 2025-19 sets the 2026 ceiling; Publication 969 explains that eligibility on December 1, 2026 can reach that ceiling, and that reaching it commits the account holder to remaining eligible through December 31, 2027. For self-only coverage in 2026, the gap between those two positions is $4,033.33 of potential income plus $403.33 of additional tax; for family coverage it is $8,020.83 and $802.08. Those are the numbers the thirteen-month clock is measuring.

This article explains how the rules are written. It is not tax, legal, or insurance advice, and it does not account for any individual situation. Amounts and thresholds change; verify the current figures at the source listed above before acting.