Can You Add Money to Your HSA Account?

A Health Savings Account (HSA) is a tax-advantaged savings account for individuals covered under a high-deductible health plan (HDHP) to save for medical expenses. Funds contributed to an HSA are not subject to federal income tax at the time of deposit. This account allows for tax-free growth of the funds and tax-free withdrawals for qualified medical expenses, providing a way to pay for current and future health costs.

Determining Your Eligibility to Contribute

To contribute to an HSA, an individual must meet several requirements set by the Internal Revenue Service (IRS). The primary rule is that you must be covered by a high-deductible health plan (HDHP) on the first day of the month for which a contribution is made. For 2025, a self-only HDHP must have a minimum annual deductible of $1,650 and a maximum out-of-pocket expense limit of $8,300. For family coverage, the minimum deductible is $3,300, with a maximum out-of-pocket limit of $16,600.

Beyond having an HDHP, you cannot have any other health coverage. Certain types of additional insurance are permitted, such as policies for dental, vision, disability, or long-term care. This rule prevents individuals with multiple layers of health coverage from also benefiting from an HSA.

You are not eligible to make HSA contributions if you are enrolled in Medicare, regardless of your age. Furthermore, you cannot be claimed as a dependent on another person’s tax return for the year you wish to contribute. This is true even if the person who could claim you as a dependent does not actually do so.

Understanding Contribution Limits and Deadlines

The amount you can contribute to your HSA each year is capped by federal limits, which are adjusted annually for inflation. For the 2025 tax year, an individual with self-only HDHP coverage can contribute up to $4,300. Those with family HDHP coverage can contribute up to $8,550, and these limits include any funds deposited by an employer.

Individuals age 55 or older by the end of the tax year can make an additional “catch-up” contribution of $1,000 per year. If both spouses in a married couple are over 55 and each has their own HSA, they can both make a $1,000 catch-up contribution to their respective accounts. You cannot have a joint HSA; each eligible individual must open a separate account.

The deadline to make contributions for a given tax year is the tax filing deadline for that year, which is April 15 of the following year. This provides additional time to fund the account. If an individual is only eligible to contribute for a portion of the year, their maximum contribution is prorated based on the number of months they were eligible.

Methods for Making Contributions

The most common method for those with employer-sponsored health plans is through pre-tax payroll deductions. With this approach, contributions are taken directly from your paycheck before taxes are calculated. This provides an immediate tax benefit by reducing your taxable income for that pay period.

Individuals can also make direct contributions to their HSA with post-tax money, such as through an electronic funds transfer or by mailing a check. These post-tax contributions are then deducted on your personal income tax return, which provides the same tax benefit as pre-tax contributions.

Another way to fund an HSA is through a rollover or transfer from another HSA, which allows you to consolidate funds or switch providers. The IRS also permits a one-time, tax-free transfer from a traditional or Roth IRA to an HSA. This distribution is limited to the maximum annual HSA contribution amount, and you must remain eligible for an HSA for a 12-month “testing period” following the transfer. If you lose eligibility during this time, the transferred amount becomes taxable income and may be subject to a penalty.

Handling Excess Contributions

Contributing more than the allowable annual limit results in an excess contribution. This amount is subject to a 6% excise tax for each year it remains in the account. The excess amount is also not tax-deductible, and if the contribution was made by an employer, it must be included in your gross income.

To avoid the 6% penalty, you must withdraw the excess contribution, along with any earnings on that excess, before the tax filing deadline. The withdrawn excess contribution is not taxed as income, but the earnings must be reported as “other income” on your tax return. You should contact your HSA administrator to request a “return of excess contribution” to ensure the distribution is coded correctly.

If the deadline is missed, another option is to apply the excess contribution to a future year’s contribution limit. This allows you to carry forward the excess amount and treat it as a contribution for the following year. This method can be complex and requires careful tracking to avoid future penalties.