Can I Put Money in an HSA Anytime?

A Health Savings Account (HSA) offers a unique opportunity to save and pay for healthcare expenses with significant tax advantages. It functions as a personal savings account specifically designed for medical costs, allowing individuals to set aside funds that can grow over time. The money in an HSA can be used for qualified medical expenses, ranging from doctor visits and prescriptions to dental and vision care. Unlike some other health savings vehicles, funds in an HSA roll over year after year, providing a long-term savings solution for future healthcare needs.

Eligibility for Contributions

Contributing to an HSA requires meeting specific eligibility criteria, primarily centered around your health insurance coverage. You must be covered by a High Deductible Health Plan (HDHP) and generally not have any other health coverage that is not an HDHP. Exceptions exist for specific types of supplemental coverage like dental, vision, or long-term care insurance.

For 2025, an HDHP is defined by certain minimum deductibles and maximum out-of-pocket expenses. Your plan must have an annual deductible of at least $1,650 for self-only coverage or $3,300 for family coverage. The plan’s annual out-of-pocket expenses, including deductibles, co-payments, and coinsurance but not premiums, cannot exceed $8,300 for self-only coverage or $16,600 for family coverage.

Beyond your health plan, additional conditions apply to HSA eligibility. You cannot be enrolled in Medicare, nor can you be claimed as a dependent on someone else’s tax return. Meeting these requirements is a prerequisite for making any contributions to an HSA.

Rules for Contribution Timing

Contributions to an HSA can generally be made at any point during the tax year for which they are intended. This flexibility allows individuals to contribute funds regularly throughout the year or make a lump-sum contribution. The deadline for making contributions for a given tax year is the tax filing deadline for that year, typically April 15th of the following calendar year, not including any extensions.

If you become eligible for an HSA partway through the year, your contribution limit is typically prorated based on the number of months you were eligible. For instance, if you become HSA-eligible on the first day of a month, you can generally contribute for that entire month. However, a special provision known as the “last-month rule” allows for greater flexibility.

Under the last-month rule, if you are an HSA-eligible individual on December 1st of a given year, you are considered eligible for the entire year and can contribute the full annual amount. A “testing period” accompanies this rule, requiring you to remain HSA-eligible through December 31st of the following year; failure to do so may result in the previously untaxed contributions becoming taxable income, plus an additional 10% penalty.

Annual Contribution Limits

The Internal Revenue Service (IRS) sets annual limits on how much money can be contributed to an HSA, which typically adjust for inflation each year. These limits apply to the total combined contributions from all sources, whether from the individual, an employer, or a combination of both.

For 2025, the maximum amount you can contribute to an HSA is $4,300 for individuals with self-only HDHP coverage. If you have family HDHP coverage, the contribution limit increases to $8,550.

An additional “catch-up contribution” is available for individuals aged 55 and over. If you are age 55 or older by the end of the tax year, you can contribute an extra $1,000 beyond the standard limit.

Methods for Making Contributions

Depositing funds into your HSA can be accomplished through several practical methods. Many individuals contribute through direct payroll deductions if offered by their employer. This method is often advantageous because the contributions are made with pre-tax dollars, reducing your taxable income directly from your paycheck.

Another common way to contribute is through direct transfers from a personal bank account to your HSA custodian. This can typically be done electronically via an Automated Clearing House (ACH) transfer or by mailing a check.

Additionally, funds can be transferred or rolled over from other qualified accounts, such as an Individual Retirement Arrangement (IRA) or another HSA. Direct transfers between HSAs are typically more straightforward and common when changing custodians.