What Is an HSA Catch-Up Contribution?
Maximize your healthcare savings with an HSA catch-up contribution. Understand how to add more to your tax-advantaged health account.
Health Savings Accounts (HSAs) offer a tax-advantaged way to save and pay for qualified medical expenses. These accounts are designed to work in conjunction with a High-Deductible Health Plan (HDHP), allowing individuals to manage healthcare costs with potential tax benefits. While standard annual contribution limits apply, certain individuals may be able to contribute additional funds. This provision helps account holders accumulate more savings specifically for future healthcare needs.
Understanding the HSA Catch-Up Contribution
An HSA catch-up contribution allows eligible individuals to contribute an additional amount to their Health Savings Account beyond the standard annual limit. This provision helps older individuals increase their healthcare savings as they approach and enter retirement.
To qualify for this additional contribution, an individual must be age 55 or older by the end of their tax year. This means that even if an individual turns 55 on December 31st, they are still eligible to make the full catch-up contribution for that year. Eligibility for any HSA contribution, including the catch-up amount, requires coverage under a qualified High-Deductible Health Plan (HDHP). Individuals must also not be enrolled in Medicare, nor can they be claimed as a dependent on someone else’s tax return.
For 2025, an HDHP must have a minimum annual deductible of $1,650 for self-only coverage or $3,300 for family coverage. Additionally, the plan’s out-of-pocket maximums, which include deductibles, co-payments, and other amounts, cannot exceed $8,300 for self-only coverage or $16,600 for family coverage.
Determining Your Catch-Up Contribution Amount
The annual dollar amount for the HSA catch-up contribution is set at $1,000. For the 2025 tax year, the standard limit for self-only HDHP coverage is $4,300, and for family HDHP coverage, it is $8,550.
Therefore, an eligible individual age 55 or older with self-only coverage can contribute a total of $5,300 ($4,300 standard + $1,000 catch-up) for 2025. For those with family coverage, the total maximum contribution becomes $9,550 ($8,550 standard + $1,000 catch-up). These limits are per eligible individual, meaning if both spouses in a family are age 55 or older and otherwise eligible, each can make a $1,000 catch-up contribution to their respective HSAs.
If an individual becomes HSA-eligible or turns age 55 partway through the year, their contribution limit, including the catch-up amount, may need to be prorated. The prorated amount is calculated based on the number of months the individual was eligible, considering eligibility on the first day of each month. The Internal Revenue Service (IRS) adjusts these contribution limits annually, reflecting changes in the cost of living.
Making Your Catch-Up Contributions
Contributions can typically be made through payroll deductions if offered by an employer. These payroll deductions are generally pre-tax, providing an immediate tax advantage by reducing taxable income.
Alternatively, individuals can contribute funds directly to their HSA custodian or administrator, such as a bank or brokerage firm. Direct contributions are tax-deductible, meaning they can be claimed as an above-the-line deduction on an individual’s federal income tax return, regardless of whether they itemize deductions. It is important to ensure that the total contributions for the year do not exceed the combined standard and catch-up limits to avoid potential excise taxes.
The deadline for making HSA contributions for a given tax year is typically the federal income tax filing deadline for that year, which is generally April 15th of the following calendar year. For instance, contributions for the 2025 tax year can be made up until April 15, 2026. This deadline applies even if an individual files for an extension on their income tax return; the contribution deadline itself is not extended.