IRS Lowers 2018 Family HSA Contribution Limit

March 13, 2018

The 2018 contribution limit for health savings accounts (HSAs) linked to family coverage will be $6,850—not $6,900, as the Internal Revenue Service (IRS) had previously announced. The IRS recalculated the limit because the Tax Cuts and Jobs Act that passed at the end of 2017 applies the so-called chained consumer price index (chained CPI) to increases in HSA and a few other employee benefit contribution limits.

In its Internal Revenue Bulletin No. 2018–10, the IRS clarified that:

  • For HSAs, the annual tax-deductible contribution limit for tax year 2018 will stay at $3,450 for HSA account holders with self-only coverage through a high-deductible health plan but has been lowered to $6,850 for account holders with family coverage through a high-deductible plan.
  • For employer adoption assistance programs, the maximum amount that can be excluded from an employee's gross income for qualified adoption expenses is reduced to $13,810 from $13,840. Also, the adjusted gross income threshold after which the adoption exclusion begins to phase out is reduced to $207,140 from $207,580.
  • Health care flexible spending accounts (FSAs), transit and other benefit limits now linked to the chained CPI were not affected for 2018.