What Is the Maximum HSA Contribution Limit?
Uncover the key parameters governing your Health Savings Account contributions to strategically build your health savings.
A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals save for healthcare expenses. It is available to those enrolled in a High-Deductible Health Plan (HDHP) and allows money to be set aside for qualified medical costs.
Eligibility for Health Savings Accounts
Eligibility to contribute to a Health Savings Account requires enrollment in a High-Deductible Health Plan (HDHP). For 2025, an HDHP must have an annual deductible of at least $1,650 for self-only coverage or $3,300 for family coverage. Annual out-of-pocket expenses, including deductibles, co-payments, and coinsurance (but not premiums), cannot exceed $8,300 for self-only coverage or $16,600 for family coverage. Individuals cannot be enrolled in Medicare or claimed as a dependent on someone else’s tax return. Other health coverage is generally not permitted, though exceptions exist for specific policies like vision, dental, or specific disease insurance. Meeting these IRS guidelines is a prerequisite for opening and contributing to an HSA.
Annual Contribution Limits
The Internal Revenue Service (IRS) sets annual limits on HSA contributions, adjusted for inflation. For 2025, the maximum is $4,300 for self-only HDHP coverage and $8,550 for family HDHP coverage. Individuals aged 55 and over can make an additional $1,000 “catch-up” contribution annually. This allows a total of $5,300 for self-only coverage and $9,550 for family coverage. If both spouses on a family plan are 55 or older, each can make the additional $1,000 contribution to their respective HSAs. These limits include all contributions, whether from the individual, an employer, or other parties. An employer contribution, for example, reduces the individual’s personal contribution limit.
Contribution Mechanics and Rules
HSA contributions can be made through payroll deductions or direct contributions. Payroll deductions are pre-tax, reducing taxable income. Direct contributions are tax-deductible. The deadline for contributions for a given tax year is generally April 15 of the following year, even if a tax filing extension is granted. Excess contributions are subject to a 6% excise tax, and any earnings are considered taxable income. To avoid penalties, remove excess contributions and associated earnings before the tax filing deadline. If HDHP coverage begins or ends mid-year, the contribution limit is prorated based on eligible months.
Tax Benefits of HSA Contributions
HSAs offer tax advantages for healthcare savings. Contributions are tax-deductible or pre-tax, reducing taxable income. Earnings within the HSA grow tax-free, allowing the balance to compound. Withdrawals for qualified medical expenses are also tax-free. This “triple tax advantage”—tax-deductible contributions, tax-free growth, and tax-free withdrawals for eligible expenses—is a key feature.
Funds roll over year to year, accumulating over a lifetime. HSAs are portable, belonging to the individual even with employer or health plan changes. After age 65, funds can be withdrawn for non-medical expenses without penalty, though these withdrawals are taxed as ordinary income.