The IRS sets annual limits that change each year

The amount you can contribute to an HSA is capped by the Internal Revenue Service and depends on the type of health coverage you have. For 2024, the limit is $4,150 if you have individual coverage, or $8,300 if you have family coverage. These numbers shift annually—the IRS announces new limits in October for the following year.

The limit applies to all contributions combined: money you put in yourself, money your employer puts in on your behalf, and money anyone else contributes on your behalf. If you exceed the limit, you owe income tax on the overage plus a 6 percent excise tax, so tracking what goes in matters.

You can only contribute to an HSA during the months you are enrolled in a high-deductible health plan (HDHP). If you switch to a different type of insurance mid-year, your contribution room for that year shrinks proportionally—though there is a special rule if you change plans on January 1.

Key Takeaways

  • The 2024 contribution limit is $4,150 for individual coverage and $8,300 for family coverage, set by the IRS and adjusted yearly.
  • Your employer's contributions count toward your limit, so you need to know what they put in before you add your own money.
  • You can only contribute during months you are actually enrolled in a high-deductible health plan, not during months you have other insurance.
  • If you turn 55, you can add an extra $1,000 per year as a catch-up contribution, and this amount does not count toward your regular limit.

How employer contributions affect your personal limit

If your employer contributes to your HSA, that money counts directly against your annual limit. If your employer puts in $2,000 and you have individual coverage, you can only add $2,150 of your own money in 2024 before hitting the $4,150 cap.

Your employer should tell you in writing how much they plan to contribute and when. Some employers contribute a lump sum in January; others spread it across paychecks. Check your pay stub or ask your benefits department for the exact amount so you do not accidentally over-contribute.

If you change jobs mid-year, contributions from both employers count toward the same annual limit. You are responsible for tracking the total across all sources.

The catch-up contribution if you are 55 or older

Once you turn 55, you can contribute an additional $1,000 per year to your HSA on top of the regular limit. This is called a catch-up contribution and is separate from the standard cap—it does not reduce your regular contribution room.

You can make catch-up contributions only in years when you are 55 or older on December 31 of that tax year. If you turn 55 in November, you can make the catch-up contribution for that year. If you turn 55 in January of the following year, you start making catch-up contributions then.

The catch-up amount does not change year to year the way the regular limit does. It has remained $1,000 since the HSA program began, though Congress could change it.

What happens if you contribute too much

If you put more money into your HSA than the limit allows, the IRS charges you two penalties on the excess amount: regular income tax plus a 6 percent excise tax. This happens automatically when you file your tax return unless you withdraw the overage and any earnings on it before the important date.

If you discover the overage before filing, you can request a refund from your HSA custodian (the bank or financial company holding the account). The refund must be processed by April 15 of the following year to avoid the penalties. Include a statement with your tax return explaining the overage and the refund.

If your employer over-contributed on your behalf, ask them to request the refund from the HSA custodian. You may need to provide documentation showing the overage.

Contribution limits when you change coverage mid-year

If you start or stop HSA-may be able to access coverage during the year, your contribution limit for that year is reduced proportionally. The IRS uses a month-by-month calculation: you can contribute 1/12 of the annual limit for each month you were enrolled in an HDHP.

There is one exception: if you change plans on January 1, you can contribute the full annual limit for that year, even if you were not enrolled in an HDHP on December 31 of the previous year. This rule is meant to help people who switch coverage at the start of the calendar year.

If you lose HDHP coverage because of a life event—marriage, birth of a child, job loss—you can still contribute for the months you were covered. Calculate your limit by counting the months, then dividing the annual limit by 12 and multiplying by the number of months you were enrolled.

How to track contributions across multiple sources

Your HSA custodian sends you a statement each quarter showing all deposits and withdrawals. This is your primary record of what went in. If your employer contributes, your pay stub should also show the amount and the date.

At tax time, your HSA custodian files Form 5498-SA with the IRS, which reports all contributions made to your account during the year. You receive a copy for your records. Compare this form to your own records to make sure all contributions are accounted for.

If you have multiple HSAs (for example, if you switched providers during the year), you must add up contributions across all accounts. The IRS treats them as a single account for contribution limit purposes.

Frequently Asked Questions

Can I contribute to an HSA if my employer already maxed out their contribution?

No. The limit is the total of all contributions—yours and your employer's combined. If your employer contributed the full amount allowed for your coverage type, you cannot add any of your own money that year. You can contribute again starting January 1 of the next year.

What if I miss the important date to fix an over-contribution?

If you do not withdraw the excess and earnings by April 15, you owe income tax on the overage plus a 6 percent excise tax. The excise tax applies every year the money stays in the account, so it compounds. Contact your HSA custodian when ready to request a refund if you realize the mistake late.

Do I have to contribute the maximum amount every year?

No. You can contribute any amount up to the limit, or nothing at all. Many people contribute less than the maximum because they do not have the cash available or do not expect to have medical expenses that year. There is no penalty for contributing less.

If I leave my job mid-year, can I still contribute to my HSA?

Only for the months you were enrolled in an HDHP through your employer. Once you lose that coverage, you cannot contribute further that year unless you enroll in a different HDHP with a new employer or through the individual market. Your existing HSA balance stays in the account and you can still withdraw from it.

Does the catch-up contribution limit ever increase?

The catch-up amount has been $1,000 since 2006. Congress would need to pass new legislation to change it. The regular annual limit adjusts for inflation each year, but the catch-up amount does not.