Benefits Buzz
HSA Contribution Deadline is April 18th for Most Individuals
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Health Savings Accounts (HSAs) have become a popular way to pay for out-of-pocket medical expenses and/or save for future medical expenses. HSAs are considered by many to be the “unicorn” of financial accounts. The primary reason for this claim to fame are the triple tax advantage features of HSAs. Contributions are tax-deductible, earnings and interest grow tax-deferred, and withdrawals are tax-free provided the money is used for an out-of-pocket medical expense.
It's estimated that around 31 million individuals have opened an HSA since its inception in 2004, but certain requirements must be met in order to be eligible to open and contribute to an HSA. In general, a person must be enrolled in a qualified high deductible health plan as defined on this web page, a person cannot have other non-qualifying health coverage (e.g., Medicare), and a person must not be claimed as a dependent on another person’s tax return.
The maximum contribution generally adjusts each year due to inflation, and contribution limits are based on whether a person has single-only coverage or family coverage on a qualified high deductible health plan. The contribution limits for 2021 for 2022 are shown below:
- 2021 single-only contribution limit: $3,600 2022 single-only contribution limit: $3,650
- 2021 family contribution limit: $7,200 2022 family contribution limit: $7,300
For both years (as well as future years), there is an additional catch-up contribution allowed of $1,000 for individuals who are 55 and older.
The timing of the contribution deadline is also based on the tax season. Personal tax returns are generally due by April 15th of each year; however, the 2021 tax filing deadline will be April 18th for most taxpayers. That means HSA contributions for 2021 can be made up until this date, but if you file your tax return before this date, the contribution deadline is the date of the filing.
For more information on HSAs, please visit our website.