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    SKP Accountants & Advisors, LLC

    Call us : (203) 933-1679 Contact Us Make Payment Client Login

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      • Assurance Services
      • Business Acquisition & Selling
      • Business Advisory Services & Solutions
      • Business Tax Planning & Compliance
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    HSA Contribution Limits Rise
    Health Savings AccountTax

    HSA Contribution Limits Rise

    By Rich PavanoJune 3, 2025No Comments

    The IRS has announced the inflation-adjusted contribution limits for Health Savings Accounts (HSAs) for 2026. Starting next year, HSA contribution limits rise. Individuals will be able to contribute slightly more to their HSAs, allowing for increased tax-advantaged savings to cover qualified medical expenses.

    HSA basics

    An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual” who is covered under a “high-deductible health plan” (HDHP). In addition, a participant can’t be enrolled in Medicare or have other health coverage (exceptions include dental, vision, long-term care, accident and specific disease insurance).

    Within specified dollar limits, an above-the-line tax deduction is allowed for an individual’s contribution to an HSA. This annual contribution limitation and the annual deductible and out-of-pocket expenses under the tax code are adjusted annually for inflation.

    Inflation adjustments for next year

    In Revenue Procedure 2025-19, the IRS released the 2026 inflation-adjusted figures for contributions to HSAs. For calendar year 2026, the annual contribution limitation for an individual with self-only coverage under an HDHP will be $4,400. For an individual with family coverage, the amount will be $8,750. These are up from $4,300 and $8,550, respectively, in 2025.

    There’s an additional $1,000 “catch-up” contribution amount for those age 55 or older in 2026 (and 2025).

    An HDHP is generally a plan with an annual deductible that isn’t less than $1,700 for self-only coverage and $3,400 for family coverage in 2026 (up from $1,650 and $3,300, respectively, in 2025). In addition, in 2026, the sum of the annual deductible and other annual out-of-pocket expenses required to be paid under the plan for covered benefits (but not for premiums) can’t exceed $8,500 for self-only coverage and $17,000 for family coverage. In 2025, these amounts are $8,300 and $16,600, respectively.

    Advantages of HSAs

    There are a variety of benefits to HSAs. Contributions to the accounts are made on a pre-tax basis. The money can accumulate tax-free year after year and can be withdrawn tax-free to pay for a variety of medical expenses such as doctor visits, prescriptions, chiropractic care and premiums for long-term care insurance. In addition, an HSA is “portable” — it stays with an account holder if he or she changes employers or leaves the workforce. Contact us if you have questions about HSAs at your business.

    Rich Pavano

    Rich Pavano

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