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New 2024 Deduction Limitation For Health Savings Accounts
The IRS has announced the new annual limitations on deductions for Health Savings Accounts (HSAs) for calendar year 2024. An HSA is a type of savings account that permits participants to set aside pre-tax dollars to pay for qualified medical expenses. A participant may only contribute to an HSA if they are enrolled in a High Deductible Health Plan (HDHP).
The 2024 annual limitations on deductions that can be placed into an HSA are $4,150 for an individual with self-only coverage and $8,300 for an individual with family coverage. These new amounts are over 7% higher than the limitations for 2023. For calendar year 2024, a HDHP is defined as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage and with an annual out-of-pocket expense limit of $8,050 for self-only coverage or $16,100 for family coverage. Any agencies that offer a HDHP and HSA should be aware of these new annual deduction limitations.