Can I Add Money to My HSA Account?
Navigate HSA contributions with our comprehensive guide. Understand eligibility, annual limits, funding methods, and managing excess funds.
A Health Savings Account (HSA) offers a tax-advantaged way to save and pay for qualified medical expenses. Contributions to an HSA are tax-deductible, funds grow tax-free, and withdrawals for eligible medical expenses are also tax-free.
Understanding Contribution Eligibility
Eligibility to contribute to an HSA is tied directly to your health insurance coverage. You must be covered by a High Deductible Health Plan (HDHP) and generally have no other health coverage. For 2025, an HDHP must have a minimum annual deductible of $1,650 for self-only coverage or $3,300 for family coverage. The plan’s annual out-of-pocket maximum cannot exceed $8,300 for self-only coverage or $16,600 for family coverage.
You cannot be enrolled in Medicare, nor can you be claimed as a dependent on someone else’s tax return. Eligibility is determined on a monthly basis. If you meet all requirements for only part of the year, your contribution limit will be adjusted accordingly.
Navigating Annual Contribution Limits
The Internal Revenue Service (IRS) sets annual limits on how much can be contributed to an HSA. For 2025, individuals with self-only HDHP coverage can contribute up to $4,300. Those with family HDHP coverage can contribute up to $8,550. These limits encompass all contributions made to your HSA from any source.
Individuals aged 55 and older are permitted to make an additional “catch-up” contribution of $1,000 annually. If eligibility for an HDHP changes during the year, the maximum allowable contribution is prorated based on the number of months you were an eligible individual.
Employer contributions to your HSA also count towards these annual limits. If your employer contributes to your account, you must reduce your own contributions by that amount to stay within the IRS maximums.
Methods for Funding Your HSA
You can fund your Health Savings Account through several methods. Individuals can make direct contributions to their HSA custodian, such as via electronic transfers or checks.
Many employers offer payroll deductions. These are pre-tax contributions deducted directly from your paycheck. Employers may also make direct contributions to your HSA as part of your benefits package.
It is also possible to transfer funds from another HSA you hold or a one-time rollover from an Individual Retirement Arrangement (IRA). Rollovers from IRAs are subject to specific rules, including being a once-in-a-lifetime transfer and counting toward your annual HSA contribution limit.
Addressing Contributions Exceeding Limits
Contributing more than the annual limit to your HSA can result in penalties. The IRS imposes a 6% excise tax on excess contributions not removed by the tax filing deadline. This tax applies for each year the excess funds remain in the account.
To rectify an excess contribution and avoid the excise tax, you must remove the excess amount, along with any earnings attributable to it, by the tax filing deadline. Contacting your HSA custodian is the first step to arrange for the removal of these funds.
You must report excess contributions on IRS Form 5329, “Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.”