Annual contribution limits are set by the IRS and change each year

The amount you can put into a Health Savings Account (HSA) depends on the type of health insurance coverage you have and the year. For 2024, the IRS limits are $4,150 for individual coverage and $8,300 for family coverage. These numbers increase most years to account for inflation, so check the current year's limit before you contribute.

Your contribution limit resets on January 1 each year. If you contribute more than the limit allows, you owe taxes on the excess amount plus a 6 percent penalty tax. The IRS will notify you if you've overcontributed, and you can withdraw the excess before your tax filing deadline to avoid the penalty.

You can contribute at any point during the year, and you have until your tax filing deadline (usually April 15 of the following year) to make contributions that count toward the previous year's limit. This is called the "catch-up" window and applies only to the prior year.

Key Takeaways

  • The 2024 IRS limit is $4,150 for individual coverage and $8,300 for family coverage, and these amounts increase annually.
  • You can contribute through payroll deductions, direct deposits to your HSA, or a combination of both, as long as the total does not exceed the annual limit.
  • If you turn 55 during the year, you can contribute an additional $1,000 catch-up amount on top of the standard limit.
  • Overcontributions trigger a 6 percent penalty tax each year the excess sits in the account, so withdraw excess funds before your tax deadline if you go over.
  • Your contribution limit drops if you enroll in an HSA-may be able to access plan partway through the year, and you must calculate a prorated amount based on the months you were covered.

How employer payroll contributions affect your limit

If your employer offers HSA contributions through payroll deduction, that money counts toward your annual limit. Your employer's contributions and your own contributions combined cannot exceed the IRS limit for your coverage type.

For example, if your employer contributes $2,000 to your HSA and you want to add your own money, you can only contribute $2,150 more in 2024 (assuming individual coverage). Many employers provide a summary of their contributions in December or January so you know how much room you have left.

If you change jobs mid-year, contributions from both employers count toward the same annual limit. You are responsible for tracking the total across all sources and making sure you do not go over. Some HSA providers will flag overcontribution risk, but not all do.

The catch-up contribution for people 55 and older

Once you turn 55, you can contribute an extra $1,000 per year on top of the standard limit. This is called a catch-up contribution and applies for the year you turn 55 and every year after, as long as you remain HSA-may be able to access.

The catch-up amount does not increase with inflation—it has been $1,000 since 2007. You can make catch-up contributions until you enroll in Medicare, at which point you lose HSA may be able to access and cannot contribute anymore.

If you turn 55 partway through the year, you can still make the full $1,000 catch-up contribution for that year. You do not need to prorate it based on the months remaining.

What happens if you enroll mid-year or lose coverage

If you enroll in an HSA-may be able to access plan after January 1, your contribution limit for that year is reduced. The IRS requires you to calculate a prorated amount based on the number of months you were covered. For each month you had coverage, you can contribute one-twelfth of the annual limit.

For example, if you enroll in individual coverage on July 1, 2024, you have seven months of coverage remaining (July through December). Your limit would be roughly $2,420 instead of the full $4,150. If your employer already contributed money before you enrolled, that counts against your prorated limit.

If you lose HSA-may be able to access coverage before the end of the year, your contribution limit for that year also drops. You must stop contributing the month your coverage ends. If you have already contributed more than your prorated limit allows, withdraw the excess before your tax filing deadline.

Employer contributions and the family coverage limit

Family coverage has a higher limit than individual coverage because it covers more people. In 2024, the family limit is $8,300. This single limit applies to the entire family account, regardless of how many people are covered under the plan.

If both spouses have access to HSAs through their employers and both are enrolled in family coverage under the same plan, they share one $8,300 limit between them. They cannot each contribute $8,300. If they are enrolled in separate family plans, each plan has its own $8,300 limit, and they can each contribute up to that amount.

Spouses can split the family contribution limit however they choose. One spouse might contribute $5,000 and the other $3,300, or they could split it 50-50. The total across both accounts cannot exceed $8,300 for the year.

How to track your contributions and avoid penalties

Your HSA provider sends you a statement each quarter or year showing all deposits and withdrawals. Keep these statements to verify that your total contributions do not exceed the IRS limit. If you have multiple HSAs (which is allowed), you must add up contributions across all accounts.

If you discover you have overcontributed, contact your HSA provider and request a withdrawal of the excess amount plus any earnings on that excess. You must withdraw by your tax filing deadline (usually April 15) to avoid the 6 percent penalty tax. The earnings on the excess are taxable income for that year.

When you file your taxes, Form 8889 reports your HSA contributions and lets you claim the deduction if you contributed outside of payroll. If you overcontributed and did not withdraw the excess by the deadline, you will owe the 6 percent penalty tax on the excess for each year it remains in the account.

Frequently Asked Questions

Can I contribute to an HSA if my employer already maxed out their contribution?

No. Your employer's contribution and your own contribution combined cannot exceed the annual limit. If your employer contributed the full limit, you cannot add any of your own money that year. You can contribute again starting January 1 of the next year.

What if I switch from individual to family coverage mid-year?

Your contribution limit increases to reflect the higher family coverage limit, but only for the months you had family coverage. Contact your HSA provider to calculate the prorated amount you can contribute for the remainder of the year based on when your coverage changed.

Do I have to contribute the full limit every year?

No. You can contribute any amount up to the limit, or nothing at all. There is no requirement to contribute each year. Money you do not contribute does not roll over to the next year's limit—each year's limit is separate.

Can I make a catch-up contribution if I turn 55 in December?

Yes. You can make the full $1,000 catch-up contribution for the year you turn 55, even if you turn 55 on December 31. You do not prorate the catch-up amount based on the month you turn 55.

What counts as an HSA contribution?

Contributions include money you deposit yourself, payroll deductions from your employer, and employer contributions. Rollovers from another HSA also count. Employer contributions to a Health Reimbursement Arrangement (HRA) that you roll into an HSA count toward your limit in the year of the rollover.