IRS Modifies HSA for 2018

By Jennifer Wicklund CPA

IRS announced a modification of the annual limitation on deductions for contributions to Health Savings Accounts (HSAs) allowed for individuals with family coverage under a high deductible health plan (HDHP) for calendar year 2018. For 2018, taxpayers may treat $6,900 as the annual limitation on the deduction for an individual with family coverage under an HDHP.

The IRS received concerns because in Rev Proc 2018-18 the amount of the annual limitation was $6850, $50 lower than $6900 originally announced in Rev Proc 2017-37. Taxpayers and employers had already relied on the $6900 amount. Also, Section 223(g)(1), requires annual inflation adjustments for HSAs to be published by June 1 of the preceding calendar year. A current year change was viewed as unduly burdensome. For more get SoundCPA Insights for Business.