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2017 HSA Contribution Limits

2017 HSA Contribution Limits
The Internal Revenue Service (IRS) released the 2017 HSA contribution limits. HSAs, or Health Savings Accounts, are tax-advantaged savings accounts usually held at a bank or other financial institution. When combined with a qualified high-deductible health plan (HDHP), HSAs are a good way to help pay for future medical expenses.

With an HSA, there is an annual contribution limit adjusted each year by the IRS. When compared to the 2016 limits, the 2017 HSA contribution limits increased $50. However, the HDHP minimum deductible and the HDHP maximum out-of-pocket did not change. Additionally, catch-up contributions for individuals 55 and older also did not change.

The table below illustrates the 2017 HSA contribution limits:

2017 HSA Contribution Limits

 IndividualFamily
Contribution Limits$3,400$6,750
HDHP Minimum Deductible$1,300$2,600
HDHP Out-of-Pocket Maximum*$6,550$13,100
Catch Up Contribution (Age 55+)$1,000
*Includes deductibles, copayments, and other amounts, but not premiums.
For more detailed information, refer to the IRS 2017 HSA Guidance document for more details.

Portability

A key feature of HSAs is their portability. Portability, by definition, is a U.S. employee's right to keep or maintain certain benefits when switching employers or when leaving the workforce (retiring). Therefore, if you change employers or leave the workforce, you can still keep your HSA. Equally important, funds left over at the end of the year are carried over to the following year. In contrast, a Flexible Spending Account (FSA), you forfeit any money not used within the plan year.

Taxes & Penalties

If you withdraw money from your HSA to pay for non-qualified medical expenses, the amount will be subject to a penalty of 20% in addition to ordinary income tax. However, if the money is used for qualified medical expenses, then the withdrawals are tax free.

Additional HSA Benefits / Information

  • The interest or other earnings on the assets in the account are tax free.
  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040.
  • HSA contributions for the 2017 tax year may be made until April 15, 2018.