amount that can be contributed to an hsa depends on
In that case, you can make the full year’s contribution, even if you didn’t have an HSA-eligible policy for the entire year. Note, however, that you must continue to have an eligible policy for all of 2016 or you will have to pay taxes and a 10% penalty on the money you contributed for the months that you didn’t have the policy in 2015, says Stephen Neeleman, founder of HSA administrator HealthEquity. The HSA catch-up contribution limit is not reduced for the year in which the individual reaches age 55 if he or she reaches age 55 after Jan. 1. For example, an individual who is HSA-eligible for all of 2015 and who turns age 55 on Dec. 1, 2015, may make a full $1,000 catch-up contribution for 2015. Keep in mind that there are some special contribution rules for individuals who are age 55 or older, mid-year HDHP enrollees and married spouses with family HDHP coverage. These rules, which are discussed below, may impact how much can be contributed to an individual’s HSA each year. Contribution limits. The IRS sets guidelines for how much you can contribute to an HSA each year. Following are the annual contribution limits for 2017 and 2018: You have until the tax-filing deadline (generally April 15) of the following year to make allowable contributions. Catch-up contributions can be made any time during the year you turn 55. This limit is called the general monthly contribution rule. The applicable maximum contribution limit depends on whether the individual has self-only HDHP coverage or family HDHP coverage on the first day of the month. Self-only HDHP coverage is HDHP coverage for only one HSA–eligible individual. If your spouse is also 55 or older, he or she may establish a separate HSA and make a “catch-up” contribution to that account. Mid-year qualification. When you enroll in a qualifying high-deductible health plan and open an HSA before the first day of December, you can contribute the total allowable amount for that year. To take advantage of the tax savings, however, you must: Stay enrolled in a qualifying high-deductible health plan for the following 12 months. If you contribute more than the allowable amount to your HSA by accident or because you ended coverage in a qualifying high-deductible health plan and/or no longer meet the other requirements defined by the IRS, you will have to count the extra amount as taxable income and the IRS may have you pay a 6% excise tax on the excess contributions. The amount you or anyone else can contribute to your HSA depends on the type of high-deductible health plan (HDHP) you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual are also considered. If you had an HSA-eligible policy for only the first few months of the year, the size of your HSA contribution is based on the number of months you had the eligible coverage. If you had the policy from January through April, for example, you can contribute one-third of the full year’s contribution. But because you had the HSA only part of the year, you may not be able to contribute the maximum amount ($3,350 for individual coverage or $6,650 for family coverage, plus an extra $1,000 if you’re 55 or older anytime in 2015). The amount you can contribute depends on when you had the eligible coverage. For a policy to be eligible in 2015, it must have a deductible of at least $1,300 for single coverage or $2,600 for family coverage and meet a few other requirements (for example, the policy cannot have a separate deductible for prescription drugs).
The amount you or anyone else can contribute to your HSA depends on the type of high-deductible health plan you have.