How Much Can I Contribute to a HSA?

A Health Savings Account (HSA) offers a tax-advantaged way to save and pay for qualified medical expenses. This type of account helps individuals prepare for healthcare costs, providing financial flexibility for both immediate and future medical needs. HSAs are designed to work in conjunction with specific health insurance plans to offer a unique savings opportunity.

HSA Eligibility Requirements

To be eligible to contribute to an HSA, an individual must be covered under a High Deductible Health Plan (HDHP). For 2025, an HDHP must have a minimum 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, which include deductibles, co-payments, and coinsurance but not premiums, cannot exceed $8,300 for self-only coverage or $16,600 for family coverage. These thresholds are set by the IRS and are subject to annual adjustment.

An individual cannot be covered by any other non-HDHP health insurance, except for specific injury, workers’ compensation, or accident insurance. Enrollment in Medicare also disqualifies an individual from contributing to an HSA. If an individual can be claimed as a dependent on someone else’s tax return, they are not eligible to contribute to an HSA. Meeting these criteria determines HSA eligibility.

Understanding Annual Contribution Limits

The Internal Revenue Service (IRS) establishes annual contribution limits for HSAs, which vary based on coverage type. For 2025, the maximum contribution for individuals with self-only HDHP coverage is $4,300. For those with family HDHP coverage, the limit for 2025 is $8,550. These limits encompass all contributions made to the HSA, whether by the individual, an employer, or any other party.

Individuals aged 55 or older are permitted to make an additional “catch-up” contribution. This additional amount is $1,000 annually and applies per individual. If both spouses in a family plan are 55 or older, each can contribute this extra amount to their respective HSAs. If an individual is not HSA-eligible for the entire year, their contribution limit is prorated based on the number of months they were eligible. The contribution is calculated as one-twelfth of the annual limit for each month of eligibility.

An exception to prorated contributions is the “last-month rule,” which allows an individual who becomes HSA-eligible on the first day of the last month of their tax year (December 1 for most taxpayers) to contribute the full annual limit. Using this rule requires the individual to remain eligible during a “testing period” that extends until December 31 of the following year. Failure to maintain eligibility during this testing period, for reasons other than death or disability, results in the inclusion of the full-year contribution amount in gross income, along with a 10% additional tax.

Managing Your Contributions

Contributing more than the annual limit or contributing when ineligible results in an excess contribution. Excess contributions are subject to a 6% excise tax for each year they remain in the account, in addition to being included in taxable income. To avoid this penalty, excess contributions and any earnings attributable to them should be removed from the HSA before the tax filing deadline, which is April 15 of the following year. Contacting the HSA provider to request a withdrawal of these excess funds is the standard process.

Contributions to an HSA can be made through several methods. Many employers offer payroll deductions, which allow pre-tax contributions directly from an employee’s paycheck. Individuals can also make direct contributions to their HSA custodian, such as a bank, credit union, or investment firm, from a personal bank account. The deadline for making contributions for a given tax year is the federal income tax filing deadline for that year, April 15 of the following calendar year. This means contributions for the 2025 tax year can be made up until April 15, 2026.