How Much Can You Contribute to an HSA?
Navigate HSA contribution limits and rules to maximize your tax-advantaged healthcare savings. Understand eligibility and avoid overpayments.
A Health Savings Account (HSA) offers a unique way to save for medical expenses with significant tax advantages. It functions as a personal savings account, specifically designed for individuals enrolled in a High-Deductible Health Plan (HDHP). Funds contributed to an HSA can grow tax-free, and withdrawals for qualified medical expenses are also tax-free. This account provides a strategic tool for managing healthcare costs, both in the present and for future needs.
Eligibility for HSA Contributions
Contributing to a Health Savings Account requires meeting specific IRS eligibility criteria. The primary requirement is enrollment in a High-Deductible Health Plan (HDHP). For 2025, an HDHP must have 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 excluding premiums) cannot exceed $8,300 for self-only coverage or $16,600 for family coverage.
Beyond HDHP enrollment, individuals cannot have other non-HDHP health coverage, though some exceptions exist for specific types like dental or vision insurance. Being covered by Medicare or TRICARE disqualifies an individual from contributing to an HSA. If you are claimed as a dependent on someone else’s tax return, you are not eligible to contribute to an HSA.
Understanding Annual Contribution Limits
The IRS sets annual contribution limits for Health Savings Accounts. These limits are adjusted periodically for inflation. For the 2025 tax year, the maximum amount an eligible individual can contribute to an HSA is $4,300 for self-only HDHP coverage. Individuals with family HDHP coverage can contribute up to $8,550.
Individuals aged 55 and older can make an additional “catch-up” contribution of $1,000 beyond the standard limits. This catch-up contribution applies per eligible individual. If both spouses in a family are 55 or older and covered under a family HDHP, each spouse can contribute an additional $1,000 to their own HSA. All contributions, including any employer contributions, count towards these annual maximums.
Calculating Your Personalized Contribution Limit
While the IRS sets standard annual contribution limits, your personalized limit can vary based on factors like partial-year eligibility or employer contributions. If you become eligible for an HSA partway through the tax year, your contribution limit is generally prorated based on the number of months you were an eligible individual. For example, if you gain HDHP coverage on July 1st, you can typically contribute a pro-rata share for the remaining six months of the year.
Employer contributions to your HSA also count towards your annual limit. The combined total of contributions from you and your employer cannot exceed the IRS-mandated annual maximum. If your employer contributes $1,000 to your self-only HSA for 2025, your personal contribution limit would be reduced by that amount, allowing you to contribute up to $3,300. For married couples, if both spouses have their own HDHP coverage, they can each open a separate HSA and contribute up to the self-only limit, plus any applicable catch-up contributions. If one spouse has family coverage, their combined contributions are managed against the family limit.
Making Contributions and Correcting Overpayments
Contributing to your Health Savings Account can be done in a few ways. Many individuals contribute through payroll deductions, which are typically made on a pre-tax basis, reducing your taxable income directly. Alternatively, you can make direct contributions to an HSA custodian, such as a bank. These direct contributions are tax-deductible, allowing you to claim them on your tax return, typically on Form 8889. You generally have until the tax filing deadline, typically April 15th of the following year, to make contributions for the prior tax year.
Occasionally, an individual might contribute more than their allowable limit, resulting in an excess contribution. Correcting an overpayment is important to avoid penalties. To address an excess contribution, you must remove the excess funds, along with any net income attributable to those funds, by the tax filing deadline, including extensions. Failure to remove the excess by this deadline can result in a 6% excise tax on the excess amount for each year it remains in the account, and any associated earnings withdrawn must be included in your gross income. This correction process is reported on Form 8889 and potentially Form 5329.