HSA Basics: HSA Contributions
You can make a contribution to your HSA each year that you are eligible. For 2008, you can contribute up to $2,900* if you have Self-only coverage and $5,800* if you have Family coverage.
*2008 amounts; adjusted annually for inflation.
Individuals age 55 and older can also make additional “catch-up” contributions. The maximum annual catchup contribution is as follows:
2008 - $900
2009 and after - $1,000
Determining Your Contribution
Your eligibility to contribute to an HSA for each month is generally determined by the whether you have HDHP coverage on the first day of the month. Your maximum contribution for the year is the greater of: (1) the full contribution, or (2) the pro rated amount. The full contribution is the maximum annual contribution for the type of coverage you have on December 1. The pro rated amount is 1/12 of the maximum annual contribution for the type of HDHP coverage you have times the number of months you have that type of coverage. If your contribution is greater than the pro rated amount, and you fail to remain covered by an HDHP for the entire following year, the extra contribution above the pro rated amount is included in income and subject to an additional 10 percent tax.
Examples: If you first have family HDHP coverage on July 1, 2008, and keep HDHP coverage through December 31, 2008, you are allowed the full $5,800 family contribution to an HSA for 2008. If you fail to remain covered by an HDHP for all of 2009, $2,900 would be included income and subject to an additional 10 percent tax.
If you have family HDHP coverage from January 1, 2008 until June 30, 2008, then cease having HDHP coverage, you are allowed an HSA contribution of 6/12 of $5,800, or $2,900 for 2008.
If you have family HDHP coverage from January 1 2008 until June 30, 2008, and have self-only HDHP coverage from July 1, 2008 to December 31, 2008, you are allowed an HSA contribution of 6/12 x $5,800 plus 6/12 of $2,900, or $4,350 for 2008.
Contributions can be made as late as April 15 of the following year.
Next: Using Your HSA