What Is the Maximum HSA Contribution Limit?
Understand how to optimize your tax-advantaged Health Savings Account for future medical costs and long-term financial health.
Health Savings Accounts (HSAs) are tax-advantaged savings and investment tools for healthcare expenses. They offer tax-deductible contributions, tax-free growth on investments, and tax-free withdrawals for qualified medical costs. HSA funds roll over year after year, allowing for accumulation over time.
Eligibility for a Health Savings Account
To contribute to a Health Savings Account, an individual must meet specific IRS criteria. They must be covered by 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. The plan’s out-of-pocket maximums cannot exceed $8,300 for self-only coverage or $16,600 for family coverage.
Other conditions apply. An individual cannot have other health coverage, be enrolled in Medicare, or be claimed as a dependent on someone else’s tax return.
Determining Your Annual Contribution Limits
The IRS sets annual contribution limits for Health Savings Accounts. For the 2025 tax year, individuals with self-only HDHP coverage can contribute up to $4,300. Those with family HDHP coverage can contribute up to $8,550. These limits represent the total amount that can be contributed to an HSA from all sources, including personal and employer contributions.
Individuals aged 55 and older are eligible to make an additional “catch-up” contribution of $1,000. If both spouses are 55 or older and covered under a family HDHP, each spouse can contribute this $1,000 catch-up amount to their own separate HSA. For example, a couple both over 55 with family coverage could potentially contribute $10,550 in 2025 ($8,550 family limit + $1,000 for spouse 1 + $1,000 for spouse 2), provided they establish separate HSA accounts for the catch-up contributions.
Contribution limits may be prorated if an individual becomes eligible or ineligible for an HSA partway through the year. The amount an individual can contribute is based on the number of months they are an eligible individual. For instance, if an individual becomes eligible on July 1st, they can contribute half of the annual limit for that tax year. However, if an individual is an eligible individual on December 1st of a given year, they may contribute the full annual amount under the “last-month rule,” but must remain an eligible individual through a testing period ending December 31st of the following year. Employer contributions directly count towards these annual limits.
Making Contributions to Your HSA
Contributions to an HSA can be made in several ways. Many employers facilitate contributions through payroll deductions, which offer the advantage of being pre-tax, reducing an employee’s taxable income. Individuals can also make direct contributions to their HSA custodian, such as a bank or financial institution. This can typically be done via electronic bank transfers, checks, or online portals offered by the custodian.
Funds can also be transferred or rolled over from other eligible accounts. This includes direct rollovers from another HSA or a one-time rollover from a Health Flexible Spending Arrangement (FSA) or Health Reimbursement Arrangement (HRA) under specific conditions. Contributions for a given tax year can be made up to the tax filing deadline for that year, typically April 15th of the following calendar year, excluding extensions.
What to Do with Excess Contributions
An excess contribution occurs when the total amount contributed to an HSA for a tax year exceeds the allowable maximum limit for that individual, including any catch-up contributions. If an individual contributes more than the permitted amount, they must take corrective action to avoid penalties. The primary step involves removing the excess contributions and any net income attributable to those excess contributions from the HSA.
This removal must occur before the tax filing deadline, including any extensions, for the year in which the excess contribution was made. If the excess contributions and their attributable earnings are not removed by this deadline, they become subject to a 6% excise tax for each year they remain in the account. The removed excess contributions are not tax-deductible, and any earnings withdrawn with the excess contributions are considered taxable income in the year of the withdrawal. This process ensures compliance with IRS regulations and helps avoid unnecessary tax liabilities.