HSA Contribution Limit: Changes and What It Means for You

April 23, 2018

Under the Tax Cuts and Jobs Act, Health Savings Account (HSA) contributions for family coverage decreased from $6,900 to $6,850. The $50 reduction for employees with family coverage was applied immediately, which is why representatives of the House Ways and Means Committee and the American Benefits Council have requested transition relief from this mid-year change, hoping to get the IRS to agree to wait to implement the limit until 2019. With this limit in effect, excess contributions would be considered employees’ taxable income and could be subject to an extra 6 percent excise tax. Employees will have the ability to receive a distribution from their HSA, if the IRS does not grant temporary relief for the year 2018 (the distribution would have to equal any existing amount that exceeds $6,850). In the meantime, employers and employees do not need to take immediate action while they wait for a decision from the IRS.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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Sikich LLP

Sikich LLP is a global company specializing in technology-enabled professional services. With more than 1,600 employees, Sikich draws on a diverse portfolio of technology solutions to deliver transformative digital strategies and ranks as one of the largest CPA firms in the United States. From corporations and not-for-profits to state and local governments and federal agencies, Sikich clients utilize a broad spectrum of services* and products to help them improve performance and achieve long-term, strategic goals. *Securities offered through Sikich Corporate Finance LLC, member FINRA/SIPC. Investment advisory services offered through Sikich Financial, an SEC Registered Investment Advisor. 