Do You Have to Have Earned Income to Contribute to an HSA?
Clarify the rules for contributing to an HSA. Learn what truly matters for eligibility and how to fund your health savings account.
A Health Savings Account (HSA) is a tax-advantaged savings vehicle for healthcare expenses. It allows individuals to set aside funds for medical costs while benefiting from tax advantages. This discussion clarifies whether earned income is necessary to contribute to an HSA.
HSA Eligibility Requirements
To contribute to a Health Savings Account, an individual must be enrolled in a qualifying High Deductible Health Plan (HDHP). For 2025, an HDHP requires a minimum annual deductible of $1,650 for self-only coverage or $3,300 for family coverage. Out-of-pocket maximums, including deductibles, co-payments, and co-insurance but not premiums, must not exceed $8,300 for self-only coverage or $16,600 for family coverage.
Beyond the HDHP, an individual must not be covered by any other health insurance that is not an HDHP, with exceptions for specific injury, vision, dental, or long-term care. The individual must also not be enrolled in Medicare, nor can they be claimed as a dependent on someone else’s tax return.
Income and Contributions Explained
An individual does not need earned income to contribute to an HSA. Eligibility is tied to meeting specific health plan and other IRS-defined criteria, not to having a particular type of income. Contributions can originate from various sources, including personal savings, investment earnings, gifts from others, or employer contributions.
The account holder, employers, and third parties like family members can all contribute to an eligible individual’s HSA. Contributions made by the account holder or a third party may be tax-deductible on the individual’s tax return. Employer contributions are typically excluded from the employee’s gross income.
Understanding Contribution Limits and Excess Contributions
The Internal Revenue Service (IRS) sets annual limits on HSA contributions, varying by HDHP coverage. For 2025, the maximum is $4,300 for self-only coverage and $8,550 for family coverage. Individuals aged 55 and older can make an additional $1,000 “catch-up” contribution.
If HSA eligibility changes mid-year, contributions may need to be pro-rated. Contributing more than the allowed annual limit results in an excess contribution. Excess amounts are subject to a 6% excise tax annually and are included as taxable income. To avoid these penalties, excess contributions and any earnings should be removed from the HSA by the tax filing deadline for the year they occurred.