On May 20, 2020, in Revenue Procedure 2020-32, the Internal Revenue Service (IRS) announced the annual contribution limits for 2021 for health savings accounts (HSA). The IRS also announced the 2021 definitional limits per Internal Revenue Code Section 223 for high deductible health plans (HDHP).
Articles Discussing Health Care Savings Accounts (HSAs).
Acknowledging “numerous unanticipated administrative and financial burdens,” the IRS officially revoked its earlier attempt to lower the 2018 health savings account (HSA) contribution limits. In guidance issued on April 26, the IRS announced that the 2018 HSA contribution limit for taxpayers with family coverage will be $6,900 as originally announced in 2017 – not the reduced $6,850 limit that was unexpectedly revealed earlier this year.
On March 5, 2018, the Internal Revenue Service released Rev. Proc. 2018-18 under Internal Revenue Bulletin No. 2018-10, reducing from $6,900 to $6,850 the maximum amount an individual with family coverage may contribute to a Health Savings Account (HSA) for the 2018 calendar year. The $50 reduction is effective immediately for the 2018 calendar year.
The health savings account (“HSA”) has become, since its creation in 2003, an increasingly popular option for employers to subsidize employee group health costs. Employees with HSAs can save money, on a tax-free basis, for medical expenses that aren’t otherwise covered. The account’s interest earnings and distributions (for qualified medical expenses) are also tax-free.