2022 2023 2024 HSA Contribution Limits and HDHP Qualification

The contribution limits for numerous tax-advantaged accounts for the next yr are normally introduced in October, apart from the HSA, which come out in April or Might. The contribution limits are adjusted for inflation every year, topic to rounding guidelines.

HSA Contribution Limits

Supply: IRS Rev. Proc. 2021-25, Rev. Proc. 2022-24, creator’s calculation.

Employer contributions are included in these limits.

The household protection numbers occurred to be double the person protection numbers in 2022 and 2024 however it isn’t at all times the case. As a result of the person protection restrict and the household protection restrict are each rounded to the closest $50, the household protection restrict will be barely extra or barely lower than double the person protection restrict when one quantity rounds up and the opposite quantity rounds down.

Age 55 Catch-Up Contribution

As in 401k and IRA contributions, you’re allowed to contribute additional in case you are above a sure age. In case you are age 55 or older by the top of the yr (not age 50 as in 401k and IRA contributions), you may contribute an further $1,000 to your HSA. In case you are married, and each of you’re age 55, every of you may contribute an extra $1,000 to your respective HSA.

Nonetheless, as a result of HSA is in a single particular person’s identify, identical to an IRA — there is no such thing as a joint HSA even when you’ve gotten household protection — solely the particular person age 55 or older can contribute the extra $1,000 in his or her personal identify. If solely the husband is 55 or older and the spouse contributes the total household contribution restrict to the HSA in her identify, the husband has to open a separate account in his identify for the extra $1,000. If each husband and spouse are age 55 or older, they should have two HSA accounts in separate names in the event that they wish to contribute the utmost. There’s no strategy to hit the mixed most with just one account.

The $1,000 further contribution restrict is fastened by regulation. It’s not adjusted for inflation.

Two Plans Or Mid-12 months Adjustments

The bounds are extra difficult if you’re married and the 2 of you’re on totally different well being plans. It’s additionally extra difficult when your medical health insurance adjustments mid-year. The insurance coverage change could possibly be attributable to a job change, marriage or divorce, enrolling in Medicare, the beginning of a kid, and so forth.

For these conditions, please learn HSA Contribution Restrict For Two Plans Or Mid-12 months Adjustments.

HDHP Qualification

You may solely contribute to an HSA in case you have a Excessive Deductible Well being Plan (HDHP). You need to use the cash already within the HSA for certified medical bills no matter what insurance coverage you at the moment have.

The IRS additionally defines what qualifies as an HDHP. For 2023, an HDHP with particular person protection should have at the least $1,500 in annual deductible and not more than $7,500 in annual out-of-pocket bills. For household protection, the numbers are a minimal of $3,000 in annual deductible and not more than $15,000 in annual out-of-pocket bills.

For 2024, an HDHP with particular person protection should have at the least $1,600 in annual deductible and not more than $8,050 in annual out-of-pocket bills. For household protection, the numbers are a minimal of $3,200 in annual deductible and not more than $16,100 in annual out-of-pocket bills.

Please observe the deductible quantity is a minimal whereas the out-of-pocket quantity is a most. If the out-of-pocket restrict of your insurance coverage coverage is just too excessive, it doesn’t qualify as an HSA-eligible coverage.

As well as, simply having the minimal deductible and the utmost out-of-pocket isn’t enough to make a plan qualify as HSA eligible. The plan should additionally meet different standards. See Not All Excessive Deductible Plans Are HSA Eligible.

Supply: IRS Rev. Proc. 2021-25, Rev. Proc. 2022-24, creator’s calculation.

Contribute Exterior Payroll

When you have a Excessive Deductible Well being Plan (HDHP) via your employer, your employer might already arrange a linked HSA for you at a particular supplier. Your employer could also be contributing an quantity in your behalf there. Your payroll contributions additionally go into that account. Your employer could also be paying the charges for you on that HSA. You save Social Safety and Medicare taxes if you contribute to the HSA via payroll.

If you contribute to an HSA exterior an employer, you get the tax deduction in your tax return, much like if you contribute to a Conventional IRA. If you happen to use tax software program, be certain the reply the questions on HSA contributions. The tax deduction reveals up on Kind 8889 line 13 and Schedule 1 line 13.

In case your HDHP additionally covers your grownup kids who aren’t claimed as a dependent in your tax return, they will additionally contribute to an HSA in their very own identify in the event that they don’t produce other non-HDHP protection. They get a separate household protection restrict. They should open an HSA on their very own with an HSA supplier.

Greatest HSA Suppliers

If you happen to get the HSA-eligible excessive deductible plan via an employer, your employer normally has a delegated HSA supplier for contributing by way of payroll deduction. It’s finest to make use of that one as a result of your contributions by way of payroll deduction are normally exempt from Social Safety and Medicare taxes. If you’d like higher funding choices, you may switch or roll over the HSA cash out of your employer’s designated supplier to a supplier of your alternative afterward. See How To Rollover an HSA On Your Personal and Keep away from Trustee Switch Charge.

In case you are not going via an employer, or should you’d prefer to contribute by yourself, you may as well open an HSA with a supplier of your alternative. For the most effective HSA suppliers with low charges and good funding choices, see Greatest HSA Supplier for Investing HSA Cash.