Health Savings Accounts (HSAs) provide a tax-advantaged way to save for qualified medical expenses, but they come with annual contribution limits set by the Internal Revenue Service (IRS). These limits help ensure HSAs are used for their intended purpose while preventing abuse as tax shelters. In 2024, the IRS has set the following contribution caps:
| Coverage Type | 2024 Annual Contribution Limit |
|---|---|
| Self-Only HDHP | $4,150 |
| Family HDHP | $8,300 |
These limits include total contributions from all sources, including your deposits and any made by your employer. For example, if your employer contributes $1,000 to your family HSA, your personal contribution limit reduces to $7,300.
Individuals aged 55 or older qualify for a catch-up contribution of an additional $1,000 annually. Thus, for 2024, those 55+ can contribute up to $5,150 for self-only coverage and $9,300 for family coverage. Both spouses aged 55+ covered under a family plan can each make a catch-up contribution, but these must be deposited into separate HSAs.
Your contribution limit is based on the calendar year (January 1–December 31), not your health plan year. Contributions for a tax year can be made until the tax filing deadline in April of the following year (April 15, 2025, for 2024 contributions).
Exceeding the annual limit triggers a 6% excise tax on the excess amount each year it remains in the account. If you discover an over-contribution by the tax filing deadline, you can withdraw the excess plus any earnings on it to avoid penalties.
To manage your contributions effectively:
- Confirm the current year’s limits each season.
- Track contributions from all sources.
- Consider automatic deposits for consistent savings.
- Take full advantage of the catch-up contribution if eligible.
- Review your account mid-year and before year-end.
Note, you must be covered under a qualifying high-deductible health plan (HDHP) to contribute to an HSA.
Common questions include:
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Do employer contributions count toward my limit? Yes, total contributions from all parties count against the limit.
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Can I contribute if on Medicare? No, Medicare enrollment disqualifies you from new contributions, but you may still use existing funds.
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What if my coverage changes mid-year? Your limit is prorated based on months under each coverage type.
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Are contributions tax-deductible? Direct contributions are deductible whether you itemize or not; employer payroll deductions typically reduce taxable income pre-tax.
For official IRS guidance, see IRS Revenue Procedure 2023-23.
For additional insights on related topics, visit our explanations on Health Savings Account and Excess Contribution Return Policy.
