On Monday, March 5th, the IRS announced a HSA limit decrease of $50 in the Revenue Procedure Bulletin No. 2018-10 for inflation adjustment in reaction to the Tax Cuts and Jobs Act. The new contribution limit in 2018 for HSAs linked to family coverage is now $6,850, no longer the previous $6,900.
What you need to know:
- The annual tax deductible contribution limit for tax year 2018 has been lowered to $6,850 for HSA account holders with family coverage through a high-deductible plan
- The annual tax deductible contribution limit for tax year 2018 will remain the same for HSA account holders with self-only coverage through a high-deductible health plan
- Health care flexible spending accounts (FSAs), transit and other benefit limits are not affected for 2018.
Please be sure to inform employees contributing to HSA of the new limit for the remainder of 2018. Generally, employees who over-contribute to HSA and do not correct it are penalized with a 6% excise tax.