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New 2018 Contribution Limit – IRS Revision

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UPDATE: The IRS revised its previous ruling on April 26th and moved the 2018 family HSA contribution limit back to $6,900. Read full details here. In an unexpected move, the IRS revised the 2018 HSA family contribution limit. The previous limit, $6,900, has been reduced by $50 to $6,850. The good news? The individual contribution limit of…

UPDATE: The IRS revised its previous ruling on April 26th and moved the 2018 family HSA contribution limit back to $6,900. Read full details here.

In an unexpected move, the IRS revised the 2018 HSA family contribution limit. The previous limit, $6,900, has been reduced by $50 to $6,850. The good news? The individual contribution limit of $3,450 has not changed.

The change, as explained by the IRS, was in part due to the new rollout of the Tax Cuts and Jobs Bill (P.L. 115-97) which passed in December 2017. If you want to read more about this contribution revision, please see the IRS bulletin here.

IRS Bulletin Details

SECTION 4. 2018 INFLATION ADJUSTED AMOUNTS FOR HEALTH SAVINGS ACCOUNTS UNDER § 223

  • Annual contribution limitation. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,850.

What You Need to Do

If you have already contributed the family maximum of $6,900 (or $7,900 for those 55 and over) for 2018 you will need to reverse the extra $50 contribution from your HSA. The good news is that you have plenty of time to take care of this.

If you are a couple on the same HSA-eligible health insurance plan but have two separate HSA accounts, if your combined contribution equals $6,900 (or $7,900/$8,900), you need to decide which account you want to reverse the extra $50 contribution from.

Lastly, if you are managing your HSA contributions through your employer, please be sure to reach out to them and adjust your contribution so that you do not exceed the new annual family limit.

If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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