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These are the IRS approved annual maximum contribution amounts that are allowed for an HSA account. This limit applies to the combined total of both employee and employer contributions.
| IRS HSA Contribution Limits | 2021 Limit | 2020 Limit |
|---|---|---|
| Employee Only | $3,600 | $3,550 |
| Employee + Spouse, Employee + Child(ren), Family | $7,200 | $7,100 |
HSA *Catch-up Contribution - ALL plans *available in excess of the employee deferral limit, for people age 55 and older | $1,000 | $1,000 |
| Info | ||
|---|---|---|
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HSA enrollees who are age 55 or older can contribute an extra $1,000 "catch-up contribution" annually to their HSAs. The catch-up contribution can be made during the year (prior to their birthday) by account holders who will turn 55 by year-end. |
The IRS publishes an annual HSA contribution maximum each year. Although the amounts the IRS publishes are annual amounts, the amount an employee can contribute into the HSA tax-free is based on a pro-rated, per month calculation. An employee is eligible for 1/12th of the annual maximum contribution for every month during the calendar year in which they were covered by medical insurance.
If you had medical benefits all 12 months, you are eligible for the full maximum HSA contribution. If you had benefits for 6 months, you are eligible to contribute half the annual limit. If an employee's HSA contributions for a year exceed the pro-rated amount for which they were eligible to contribute to a HSA, they will be responsible to pay taxes on the excess HSA contribution amount as well as a 6% penalty.
Contributions, earnings, and distributions (when used to pay for qualified health expenses) are 100% exempt from federal income tax and FICA tax.
