An adjustment to Family Contribution Limits under an HSA policy for 2018, LISTEN UP!
The 2018 contribution limit for Health Savings Accounts (HSAs) linked to family coverage will be $6,850- no longer $6,900, as the IRS had previously indicated. The IRS recalculated the limit because the Tax Cuts and Jobs Act that passed at the end of 2017.
We hear you, $50 doesn’t seem like much but most people make their contributions at the beginning of the year and don’t think about their HSAs much until tax time the following year and at that point it may be too late.
Generally, employees who over- contribute to an HSA and don’t correct it will get hit with a 6 percent excise tax.
Key notes to keep in mind from the Internal Revenue Bulletin No. 2018-10 that was released March 5th regarding HSAs and FSAs:
- For HSAs, the annual tax-deductible contribution limit for tax year 2018 will stay at $3,450 for HSA account holders with self-only coverage through a high-deductible health plan but has been lowered to $6,850 for account holders with family coverage through a high-deductible plan.
- Health care flexible spending accounts (FSAs), transit and other benefit limits were not affected for 2018.
What’s the bottom line? Let us make it simple: please ensure that your contributions for family coverage in 2018 does not exceed $6,850!