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NEWS: 2020 Limits on HSA Contributions

IRS has announced the annual inflation-adjusted limits on deductions for contributions to a health savings account (HSA) allowed for taxpayers with family coverage under a high-deductible health plan (HDHP) for calendar year 2020. To be eligible to contribute to an HSA, an individual must participate in an HDHP, an insurance plan with a lower premium but much higher deductibles, co-pays, annual out-of-pocket expenses, and other amounts.

HSA contribution limits for 2020

For 2020, the annual limit on deductible contributions is $3,550 for individuals with self-only coverage under an HDHP (a $50 increase from 2019) and $7,100 for family coverage (a $100 increase from 2019).

The limits on annual deductibles are also subject to annual inflation adjustments. For 2020, the lower limit on the annual deductible for an HDHP is $1,400 for self-only coverage and $2,800 for family coverage, both increased from 2019. The upper limit for out-of-pocket expenses is $6,900 for self-only coverage and $13,800 for family coverage, both increased from 2019.

For further information about this change or to discuss your particular tax situation, contact your BGW team.