IRS Announces Relief for 2018 HSA Limit
The Internal Revenue Service has announced relief for taxpayers (and arguably for plan sponsors) regarding a reduction in the 2018 maximum contribution limits for health savings accounts (HSAs).
Tax reform legislation signed into law last year impacted some of the benefit cost-of-living adjustments, notably (for our purposes), the maximum 2018 contribution to a family HSA.
A change in the inflation adjustment calculations for 2018 under the Tax Cuts and Jobs Act reduced the maximum deductible HSA contribution for taxpayers with family coverage under an HDHP by $50, to $6,850. The change wasn’t much, but some employees may have already contributed the previously announced 2018 family maximum of $6,900, and if so, that (now) excess contribution needs to be withdrawn from the HSA by April 15, 2019, to avoid a 6% excise tax.
However, thanks to relief announce in Revenue Procedure 2018-27
, the IRS says it will allow the $6,900 limitation to remain in effect for 2018.