The IRS announced on Thursday, April 26, that it’s modifying the annual limitation on 2018 HSA family contributions. Under Rev. Proc. 2018-27, taxpayers will be allowed to treat $6,900 as the annual limitation for 2018, as opposed to the $6,850 limitation announced earlier this year.
Background
- In May 2017, the IRS released initial inflation adjustments for HSAs and other tax items. Under that revenue procedure, the 2018 HSA family contribution limit was set at $6,900.
- In December 2017, Congress passed the Tax Cut and Jobs Act, which mandated a change to the inflation adjustment calculations. In response, the IRS revised the limitation amount to $6,850.
- The IRS received numerous complaints after announcing the new lower limit. Individual tax payers, employers and payroll administrators expressed concern that the changes would be costly and difficult
to implement.
- As a result, the new effective maximum contribution for an individual with family coverage is $6,900.
For questions, contact your Bukaty benefits consultant at 913.345.0440.
