The Internal Revenue Service announced in late April Health Savings Accounts (HSA) limit for 2023.
Now, with taxpayers in the midst of open enrollment, the high-deductible health plans (HDHPs) will make an impact for tax planning purposes.
The annual inflation-adjusted limit on HSA contributions for self-only coverage will be $3,850, up from $3,650 in 2022. The HSA contribution limit for family coverage will be $7,750, up from $7,300.
These changes represent about a 5.5 percent increase over 2022 contribution limits.
The tax implications of the new limits relate to any amount that an employee defers to their HSA, is a reduction in taxable wages or income. Therefore, they are getting the advantage of paying for qualified medical expenses using pre-tax dollars.
Please refer to the chart below for contribution and out-of-pocket limits for HSAs and HDHPs.
Contribution and Out-of-Pocket Limits for HSAs and HDHPs |
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2022 | 2023 | Change |
|
HSA Contribution Limit (employer+ employee) |
Self: $3,650 Family: $7,300 |
Self: $3,850 Family: $7,750 |
Self: +$200 Family +$450 |
|
HSA Catch-Up Contributions (age 55 or older) |
$1,000 | $1,000 | No Change |
| HDHP Minimum Deductibles |
Self: $1,400 Family: $2,800 |
Self: $1,500 Family: $3,000 |
Self: +$100 Family +$200 |
| HDHP Maximum Out-of-Pocket Amounts (deductibles, co-pays and other amounts, but not premiums) |
Self: $7,050 Family: $14,100 |
Self: $7,500 Family: $15,000 |
Self: +$450 Family +$900 |
| Source: IRS Revenue Procedure 2022-24 | |||