HSA family max contribution lowered to $6850 for 2018 [and changed to $6900 again]

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toblerone
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HSA family max contribution lowered to $6850 for 2018 [and changed to $6900 again]

Post by toblerone »

[UPDATE: $6900 limit has been restored for 2018 - see viewtopic.php?f=2&t=243621&start=100#p3900977 - moderator prudent]

I didn't see this posted yet. The max was $6900 and now it's $50 lower, apparently due to tax law changes. For those of us that already maxed our HSAs at $6900, how much of a pain will this be to fix and report?
Here is the relevant link and text:

https://www.irs.gov/irb/2018-10_IRB

SECTION 4. 2018 INFLATION ADJUSTED AMOUNTS FOR HEALTH SAVINGS ACCOUNTS UNDER § 223
Annual contribution limitation. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450. For calendar year 2018, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,850.
TwstdSista
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Re: HSA family max contribution lowered to $6850 for 2018

Post by TwstdSista »

What? What the what?

Holy irritating. Let's wait until ten weeks into the year to make changes to said same year. Way to create a lot of hassles. Grrr....

Call your HSA provider? Remove the excess contribution and any associated gains? I'm actually not sure how to fix your issue, I'm mostly just irritated with the IRS. (and grateful we have filled our HSA yet).
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jhfenton
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Re: HSA family max contribution lowered to $6850 for 2018

Post by jhfenton »

I don’t believe it. I’m not aware the the tax bill made any changes to the HSA contribution limit calculations, and I don’t believe the IRS would quietly bury a mid-year $50 change.

I’m guessing that it is a mistake that will be corrected. I’ll do more research later at work.
ivk5
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Re: HSA family max contribution lowered to $6850 for 2018

Post by ivk5 »

Definitely surprising but doesn't appear to be a simple "mistake", since Rev. Proc. 2018-18 explicitly supersedes Rev. Proc. 2018-37 where the $6,900 family limit was previously published:
SECTION 1. PURPOSE

This revenue procedure modifies and supersedes certain sections of Rev. Proc. 2017–58, 2017–45 I.R.B. 489, and supersedes Rev. Proc. 2017–37, 2017–21 I.R.B. 1252, to reflect statutory amendments by An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, Pub. L. 115–97, 131 Stat. 2504 (the Act).
Edited to add: my understanding is this is the result of the change under the Tax Cuts and Jobs Act (TCJA) to using chained CPI (C-CPI-U) in place of CPI-U for inflation-indexed adjustments.

Some have taken note. See, e.g., Lexology: IRS Recalculates 2018 Benefit Limits:
[Taxpayers] who have already contributed the maximum amount for 2018, such as a one-time HSA contribution from a beginning of the year bonus payment, will need to receive a refund of the excess contribution.
In my case I may not be covered by a qualifying plan beyond March, and have already contributed $1,725 which would have been the pro rata max under the prior guidance. Looks like I may need to have excess contribution of $12.5 plus associated earnings returned. Looking fwd to seeing how Lively handles that... But will wait until I'm definitely off the qualifying plan, in case that change happens later than expected.
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HueyLD
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Re: HSA family max contribution lowered to $6850 for 2018

Post by HueyLD »

TwstdSista wrote: Wed Mar 07, 2018 5:33 am What? What the what?

Holy irritating. Let's wait until ten weeks into the year to make changes to said same year. Way to create a lot of hassles. Grrr....

Call your HSA provider? Remove the excess contribution and any associated gains? I'm actually not sure how to fix your issue, I'm mostly just irritated with the IRS. (and grateful we have filled our HSA yet).
The IRS is only doing what it is required to do under the new TCJA law. You should not shoot the messager.

The chained CPI at work here.
camaro327
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Re: HSA family max contribution lowered to $6850 for 2018

Post by camaro327 »

I would contact your HR department if your HSA is done through payroll deduction. If your HSA is done directly with a bank I would contact the bank and ask them how to remove the extra $50.

If you do this now it should not be an issue when you file next year.
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jhfenton
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Re: HSA family max contribution lowered to $6850 for 2018

Post by jhfenton »

HueyLD wrote: Wed Mar 07, 2018 6:49 am The IRS is only doing what it is required to do under the new TCJA law. You should not shoot the messager.

The chained CPI at work here.
Yep. I thought that only applied after 2018 (i.e. for calculations based on 2018 inflation and later), but apparently not. :oops:

i was going to have to alter my HSA payroll contributions anyway, because my wife's new employer is going to contribute $961.5x (25/26 of $1,000) to her HSA. I'll have to change mine to $5,888.xx instead of $5,938.xx.
Last edited by jhfenton on Wed Mar 07, 2018 8:27 am, edited 2 times in total.
runner3081
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Re: HSA family max contribution lowered to $6850 for 2018

Post by runner3081 »

Wow, insane. Fortunately we spread it out all year, so no impact. Will contact the HR department tomorrow and make sure they plan on changing the limit in their system.
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HueyLD
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Re: HSA family max contribution lowered to $6850 for 2018

Post by HueyLD »

jhfenton wrote: Wed Mar 07, 2018 8:26 am
HueyLD wrote: Wed Mar 07, 2018 6:49 am The IRS is only doing what it is required to do under the new TCJA law. You should not shoot the messenger.

The chained CPI at work here.
Yep. I thought that only applied after 2018 (i.e. for calculations based on 2018 inflation and later), but apparently not. :oops:
I think this paragraph explains the HSA adjustment.
Section 11002 of the Act amends § 1f(3) to provide a permanent cost-of-living adjustment based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). Any existing items that are not reset for 2018 will be adjusted for inflation after 2017 based on the C-CPI-U. Items that are reset for 2018 will be adjusted for inflation after 2018 based on the C-CPI-U.
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Edie
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Edie »

Thank you for bringing this up. I hadn't seen it before your post. Glad I haven't maxed it yet, but good to know I need to make a change in payroll deduction.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Texanbybirth »

Edie wrote: Wed Mar 07, 2018 9:24 am Thank you for bringing this up. I hadn't seen it before your post. Glad I haven't maxed it yet, but good to know I need to make a change in payroll deduction.
Ditto!
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jhfenton
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Re: HSA family max contribution lowered to $6850 for 2018

Post by jhfenton »

HueyLD wrote: Wed Mar 07, 2018 8:50 am
jhfenton wrote: Wed Mar 07, 2018 8:26 am
HueyLD wrote: Wed Mar 07, 2018 6:49 am The IRS is only doing what it is required to do under the new TCJA law. You should not shoot the messenger.

The chained CPI at work here.
Yep. I thought that only applied after 2018 (i.e. for calculations based on 2018 inflation and later), but apparently not. :oops:
I think this paragraph explains the HSA adjustment.
Section 11002 of the Act amends § 1f(3) to provide a permanent cost-of-living adjustment based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). Any existing items that are not reset for 2018 will be adjusted for inflation after 2017 based on the C-CPI-U. Items that are reset for 2018 will be adjusted for inflation after 2018 based on the C-CPI-U.
"Explains" is a generous word. :beer I'm not going to spend much more time on it, because it doesn't matter for anything I do, but I still don't see anything that would have led me to expect a 2018 limit based on inflation through through March 31, 2017 (and required to be published by June 1, 2017) to be recalculated.
AnonJohn
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Re: HSA family max contribution lowered to $6850 for 2018

Post by AnonJohn »

Thanks for posting! No way I'd have otherwise caught it.

From a theoretical perspective, interesting that the chained CPI calculation is applied or has an impact here, given that "substitutibility" / consumer choice is usually not an option for much of the health care marketplace.
Spirit Rider
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Spirit Rider »

Hold on. Do NOT rush to remove excess contributions:
  • I do not know of any HSA custodian who doesn't charge to remove excess contributions and their earnings, typically $20 - $25.
  • It is far less expensive to file form 5329 with your 2018 tax return and pay a $50 * 6% = $3 excise tax, stay $50 under the 2019 contribution limit and file a 2019 5329 to remove the carryover. By no later that the 1st month of 2019, you will know if this is a viable strategy.
  • And the no cost possibility, the IRS could issue guidance that anyone who over contributed in good faith could make a $50 "mistake of fact" withdrawal for this purpose and not have it considered a non-qualified withdrawal.
ausgenf
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Re: HSA family max contribution lowered to $6850 for 2018

Post by ausgenf »

Thanks for posting this. My HSA administrator still has the $6,900 family max on their website.
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HueyLD
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Re: HSA family max contribution lowered to $6850 for 2018

Post by HueyLD »

Spirit Rider wrote: Wed Mar 07, 2018 11:28 am Hold on. Do NOT rush to remove excess contributions:
  • I do not know of any HSA custodian who doesn't charge to remove excess contributions and their earnings, typically $20 - $25.
  • It is far less expensive to file form 5329 with your 2018 tax return and pay a $50 * 6% = $3 excise tax, stay $50 under the 2019 contribution limit and file a 2019 5329 to remove the carryover. By no later that the 1st month of 2019, you will know if this is a viable strategy.
  • And the no cost possibility, the IRS could issue guidance that anyone who over contributed in good faith could make a $50 "mistake of fact" withdrawal for this purpose and not have it considered a non-qualified withdrawal.
+1.
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MP123
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Re: HSA family max contribution lowered to $6850 for 2018

Post by MP123 »

Is this switch over to chained CPI likely to change any other contribution limits (Roth, 401k, etc) that were already published for 2018?
Glockenspiel
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Glockenspiel »

What the hell? I work for a smaller company, and I'm sure our accounting/payroll people have no idea that this happened. Should I contact them and see if they will adjust my withholdings for the remainder of the year, to stay in compliance with the $6,850?
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Re: HSA family max contribution lowered to $6850 for 2018

Post by jhfenton »

Spirit Rider wrote: Wed Mar 07, 2018 11:28 am Hold on. Do NOT rush to remove excess contributions:
  • I do not know of any HSA custodian who doesn't charge to remove excess contributions and their earnings, typically $20 - $25.
  • It is far less expensive to file form 5329 with your 2018 tax return and pay a $50 * 6% = $3 excise tax, stay $50 under the 2019 contribution limit and file a 2019 5329 to remove the carryover. By no later that the 1st month of 2019, you will know if this is a viable strategy.
  • And the no cost possibility, the IRS could issue guidance that anyone who over contributed in good faith could make a $50 "mistake of fact" withdrawal for this purpose and not have it considered a non-qualified withdrawal.
+2 :beer
GuineaPig
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Re: HSA family max contribution lowered to $6850 for 2018

Post by GuineaPig »

Spirit Rider wrote: Wed Mar 07, 2018 11:28 am Hold on. Do NOT rush to remove excess contributions:
  • I do not know of any HSA custodian who doesn't charge to remove excess contributions and their earnings, typically $20 - $25.
  • It is far less expensive to file form 5329 with your 2018 tax return and pay a $50 * 6% = $3 excise tax, stay $50 under the 2019 contribution limit and file a 2019 5329 to remove the carryover. By no later that the 1st month of 2019, you will know if this is a viable strategy.
  • And the no cost possibility, the IRS could issue guidance that anyone who over contributed in good faith could make a $50 "mistake of fact" withdrawal for this purpose and not have it considered a non-qualified withdrawal.
Yeah, so my family made the full $6,900 contribution in January. I am not going to rush on anything here -- I see no reason why I'd have to correct things right now, rather than later during the year.

I am first going to wait and see if my HSA provider gives guidance. Also going to see if either Congress or the IRS resolves this for 2018. Sigh.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by jebmke »

GuineaPig wrote: Wed Mar 07, 2018 12:25 pm Also going to see if either Congress or the IRS resolves this for 2018
:P
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Epsilon Delta
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Epsilon Delta »

Section 11002 of the Act amends § 1f(3) to provide a permanent cost-of-living adjustment based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). Any existing items that are not reset for 2018 will be adjusted for inflation after 2017 based on the C-CPI-U. Items that are reset for 2018 will be adjusted for inflation after 2018 based on the C-CPI-U.
That is the intent. It may be what section 11002 does. But that section is actually a long list of individual items that switch from CPI to chained CPI rather than a global edict. What's the chances they missed something?
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Re: HSA family max contribution lowered to $6850 for 2018

Post by abner kravitz »

I called my HSA provider (Fidelity) and they gave me a form to fill out. They will reverse the $50 excess (no charge) and they say it will be invisible to the IRS.

If I wasn't the nervous type, I might just wait and see how this all shakes out, but I can't help myself. I like to have all the tax stuff for the year done by the end of March.
Jb11
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Jb11 »

My HSA provider (HSABank) has already updated my account to show the new 2018 maximum contribution limit.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Glockenspiel »

jebmke wrote: Wed Mar 07, 2018 12:38 pm
GuineaPig wrote: Wed Mar 07, 2018 12:25 pm Also going to see if either Congress or the IRS resolves this for 2018
:P
+1 I'm fairly confident this isn't on Congress's priority list.
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simplesimon
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Re: HSA family max contribution lowered to $6850 for 2018

Post by simplesimon »

I just received an email from my work's HSA custodian about this change. I'm going to wait a week to see if HR sends an email update before prodding them.
lstone19
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HSA maximum change

Post by lstone19 »

[merged lstone19's post and a reply into this existing thread - moderator prudent]

Just received the following from my wife's HSA administrator (Payflex):
"The Internal Revenue Service (IRS) announced on March 5, 2018 a decrease in maximum Health Savings Account (HSA) contributions.

Effective for calendar year 2018, the family contribution limit for HSAs has been reduced from $6,900 to $6,850. This change applies immediately. Any family contribution to an HSA in 2018 over the max could be subject to taxes and penalties. The individual contribution limit for 2018 will remain at $3,450.

The IRS officially announced these changes when it published Internal Revenue Bulletin (IRB) 2018-10, which contains Revenue Procedure (Rev. Proc.) 2018-18. This change is a result of a provision in H.R. 1 (“Tax Reform”) that changed the way inflation-related increases are calculated."

Like, what???? After the year has started and deductions have been set to reach the maximum? So now, we have to wait and see if her employer is going to automatically change the deduction amount and how. Or does she need to do it herself.

And for anyone who changes from an HDHP to a non-HDHP mid-year and needs to pro-rate, there is the danger of having overfunded it. At this point after two months of checks, she's slightly above 2/12s of the new annual limit (and the funny thing is, her employer, who pays bi-weekly, finally got smart and switched from 26 HSA deductions per year to 24 skipping the deduction in the two months per year with three pay dates to avoid pro-ration issues).
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Re: HSA maximum change

Post by Nate79 »

lstone19 wrote: Wed Mar 07, 2018 2:13 pm Just received the following from my wife's HSA administrator (Payflex):
"The Internal Revenue Service (IRS) announced on March 5, 2018 a decrease in maximum Health Savings Account (HSA) contributions.

Effective for calendar year 2018, the family contribution limit for HSAs has been reduced from $6,900 to $6,850. This change applies immediately. Any family contribution to an HSA in 2018 over the max could be subject to taxes and penalties. The individual contribution limit for 2018 will remain at $3,450.

The IRS officially announced these changes when it published Internal Revenue Bulletin (IRB) 2018-10, which contains Revenue Procedure (Rev. Proc.) 2018-18. This change is a result of a provision in H.R. 1 (“Tax Reform”) that changed the way inflation-related increases are calculated."

Like, what???? After the year has started and deductions have been set to reach the maximum? So now, we have to wait and see if her employer is going to automatically change the deduction amount and how. Or does she need to do it herself.

And for anyone who changes from an HDHP to a non-HDHP mid-year and needs to pro-rate, there is the danger of having overfunded it. At this point after two months of checks, she's slightly above 2/12s of the new annual limit (and the funny thing is, her employer, who pays bi-weekly, finally got smart and switched from 26 HSA deductions per year to 24 skipping the deduction in the two months per year with three pay dates to avoid pro-ration issues).
We also have Payflex thru my employer and got the same email.

At the bottom of the email it says this:
Be sure to make any necessary changes to your annual election.
What?? I have no idea how my employer is going to handle this as well. Why couldn't the IRS just said $6,900 is close enough for government work and let it slip until next year. What a joke.
Hanksmoney
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Hanksmoney »

Spirit Rider wrote: Wed Mar 07, 2018 11:28 am Hold on. Do NOT rush to remove excess contributions:
  • I do not know of any HSA custodian who doesn't charge to remove excess contributions and their earnings, typically $20 - $25.
  • It is far less expensive to file form 5329 with your 2018 tax return and pay a $50 * 6% = $3 excise tax, stay $50 under the 2019 contribution limit and file a 2019 5329 to remove the carryover. By no later that the 1st month of 2019, you will know if this is a viable strategy.
  • And the no cost possibility, the IRS could issue guidance that anyone who over contributed in good faith could make a $50 "mistake of fact" withdrawal for this purpose and not have it considered a non-qualified withdrawal.
Thanks - what is crazy is my paycheck being issued this Thursday will be hitting the $6900 mark for me for 2018. No stopping that.
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Re: HSA maximum change

Post by jhfenton »

Nate79 wrote: Wed Mar 07, 2018 2:22 pm What?? I have no idea how my employer is going to handle this as well. Why couldn't the IRS just said $6,900 is close enough for government work and let it slip until next year. What a joke.
I left a message for our benefits people this morning, because I don't expect them to know what's happening yet.

I personally went in today and requested an HSA contribution change in our HR portal. My change window will open tomorrow, and I will drop my contribution from $5,900 to $5,850. (My wife's employer is contributing $1,000 to her HSA.) It will take effect for my paycheck in two weeks. (Our paycheck for this Friday is already visible.)

If we want to contribute through payroll, we have no choice but for it to be prorata through the year. They do the math on the per-paycheck deduction.
AnonJohn
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Re: HSA family max contribution lowered to $6850 for 2018

Post by AnonJohn »

I notice the family contribution is now less than 2x the individual contribution. I assume that's a rounding thing that will disappear most years, but ... haven't seen it before. Scarcely seems fair ...
mikep
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Re: HSA family max contribution lowered to $6850 for 2018

Post by mikep »

Is the catch up amount still the same?
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2018 HSA Contribution Limit Announced

Post by Alan S. »

Note the reduction, and be sure that an excess contribution is avoided for 2018:

http://www.theabdteam.com/abd-insights/ ... duced-6850
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Re: HSA family max contribution lowered to $6850 for 2018

Post by LadyGeek »

^^^ I merged Alan S.' post into here. The combined thread is in the Personal Finance (Not Investing) forum.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by mikep »

Is health FSA still $2650?
Atgard
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Atgard »

I had no idea they could retroactively change it, I already put in the whole $6,900 for the year. What a pain. Can they do this to IRA limits next? Seems to me they need to have it sorted before Jan 1!
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Re: HSA maximum change

Post by inbox788 »

lstone19 wrote: Wed Mar 07, 2018 2:13 pmEffective for calendar year 2018, the family contribution limit for HSAs has been reduced from $6,900 to $6,850. This change applies immediately. Any family contribution to an HSA in 2018 over the max could be subject to taxes and penalties. The individual contribution limit for 2018 will remain at $3,450.
I will hope my company will make the correct adjustment; they have when 401k was going to go over. Otherwise, I will take my chances if I'm ever audited. This will be a footnote compared to other things they're probably interested in. What's the tax and penalty if found 3 years later and the required correction? Stupid administrative changes like these are nothing but confusion to taxpayers, and IMO, not simplifying things. Whatever perceived cost savings they might be adjusting for will likely be far outweighed by the administrative cost in time and resources to deal with this trivial change. And it adds another straw or thorn to everyone who is impacted.

I hope someone wises up and just forgoes whatever benefit making this change would bring forgoing a few million in taxes to save even more in support costs, so in essence spending all the so called extra revue and more. And not be be spending even more millions trying to catch all the people making mistakes and later facing a class action lawsuit.
Last edited by inbox788 on Wed Mar 07, 2018 6:27 pm, edited 1 time in total.
Spirit Rider
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Spirit Rider »

abner kravitz wrote: Wed Mar 07, 2018 12:44 pm I called my HSA provider (Fidelity) and they gave me a form to fill out. They will reverse the $50 excess (no charge) and they say it will be invisible to the IRS.
And what form did they give you to fill out?

I am not aware of any provision of the tax code that allows a custodian to return any contribution except as an excess contribution and earnings. They are certainly able to wave a charge or never have a charge in the first place.

However, to remain in IRS compliance they should have to also return the earnings and report them on your 2018 1099-SA Box 2 and in Box 3 Distribution code, Code 2 Excess contributions.

You might call them again and verify exactly how they are doing this.

Now, if your custodian will waive the fee like Fidelity appears willing to do and the tax on any earnings will be < $3. It might make sense for you do so sooner rather that later given that YTD is not likely to yield substantial earnings.

I would still suggest others wait rather that paying a substantial fee to remove a $50 excess contribution.
Chicago60
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Chicago60 »

Thanks for posting this information. I already made the 2018 family (55+) contribution of $7,900 in January. I called Fifth Third Bank, my HSA provider, and was directed to a form available online for over contribution correction. I just printed the form, completed it, and will mail it tomorrow. The $50 overfunding will be direct deposited back in my bank account.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Northern Flicker »

I will hope my company will make the correct adjustment; they have when 401k was going to go over. Otherwise, I will take my chances if I'm ever audited
Your HSA contribution will be reported to the IRS using form 5498-SA. If you overcontribute, you will likely just get a computer-generated letter billing you for the penalty you owe for the overcontribution.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Artsdoctor »

Fantastic pick-up on the Bogleheads' part. It is true that the maximum has been decreased so there's no point in waiting to adjust your withholding. However, it's pretty interesting that you can't find the interesting just by going to the IRS website--you have to actively search for it on Google and you'll get the bulletin. So even the most avid IRS watcher wouldn't know about this (try getting the information using irs.gov alone).

I think this is the Wild Wild West of taxes at this point. In addition to the above, taxpayers are all supposed to now compute their own withholding using the tax calculators which the IRS has set up. I've looked at those calculators and I'm going to bet that most people are not going to use them, so good luck with that.

Thankfully, the forum here will probably be your best source of tax information in this new era, so you might want to spend a little extra time browsing amongst friends here.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Spirit Rider »

Chicago60 wrote: Wed Mar 07, 2018 6:28 pm Thanks for posting this information. I already made the 2018 family (55+) contribution of $7,900 in January. I called Fifth Third Bank, my HSA provider, and was directed to a form available online for over contribution correction. I just printed the form, completed it, and will mail it tomorrow. The $50 overfunding will be direct deposited back in my bank account.
Did you ask if there was a fee?
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Chicago60 »

Spirit Rider wrote: Wed Mar 07, 2018 6:42 pm
Chicago60 wrote: Wed Mar 07, 2018 6:28 pm Thanks for posting this information. I already made the 2018 family (55+) contribution of $7,900 in January. I called Fifth Third Bank, my HSA provider, and was directed to a form available online for over contribution correction. I just printed the form, completed it, and will mail it tomorrow. The $50 overfunding will be direct deposited back in my bank account.
Did you ask if there was a fee?
Nope. I am (reasonably) certain there will not be, given the circumstances. And, if a fee is attempted to be assessed, I: (1) will not pay it, and (2) will move the funds elsewhere.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by tfb »

AnonJohn wrote: Wed Mar 07, 2018 4:25 pm I notice the family contribution is now less than 2x the individual contribution. I assume that's a rounding thing that will disappear most years, but ... haven't seen it before. Scarcely seems fair ...
It happened several times in the past. Both limits are rounded to $50. So they are often slightly out of sync.
Harry Sit, taking a break from the forums.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Spirit Rider »

Chicago60 wrote: Wed Mar 07, 2018 6:45 pm
Spirit Rider wrote: Wed Mar 07, 2018 6:42 pm Did you ask if there was a fee?
Nope. I am (reasonably) certain there will not be, given the circumstances. And, if a fee is attempted to be assessed, I: (1) will not pay it, and (2) will move the funds elsewhere.
Wouldn't it be easier if you just called and asked.

If they will be charging a fee:
(1) You will have no choice on whether to pay or not, because they will just deduct it from your account.
(2) You will already be out the fee.
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toblerone
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Re: HSA family max contribution lowered to $6850 for 2018

Post by toblerone »

My HSA is at Optum, thru my employer. Optum sent HR a notice today regarding the limit change, and link to the excess contribution form for us suckers that already contributed $6900. Thankfully there is no fee.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by Chicago60 »

"Easier?" You might think, but I do not think so. The account is overfunded by $50, period. I believe I am required to withdraw that amount. If I called and was told there was a fee associated with the withdrawal, I would still have to complete the paperwork, and arguably consent to the fee. Under my approach, I can object--albeit after the fact--that a fee was assessed improperly, given the circumstances: the IRS (and Fifth Third's own website) reported that the maximum contribution for a family over 55 for 2018 was $7,900, and I made the contribution of that amount. Within 2 days of the IRS guidelines correcting (maybe clarifying) the previous reporting, I, in good faith, contacted 5th 3d, completed the paperwork without being told there would be a fee, and mailed it in.

I respectfully prefer my approach to yours.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by bberris »

Chicago60 wrote: Wed Mar 07, 2018 6:28 pm Thanks for posting this information. I already made the 2018 family (55+) contribution of $7,900 in January. I called Fifth Third Bank, my HSA provider, and was directed to a form available online for over contribution correction. I just printed the form, completed it, and will mail it tomorrow. The $50 overfunding will be direct deposited back in my bank account.
A family is allowed to contribute 8,850 if both of you are over 55 this year. The catch is that you need two hsa accounts, one for each spouse, and at least 1,000 in each account.
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Re: HSA family max contribution lowered to $6850 for 2018

Post by jhfenton »

Spirit Rider wrote: Wed Mar 07, 2018 7:29 pm
Chicago60 wrote: Wed Mar 07, 2018 6:45 pm
Spirit Rider wrote: Wed Mar 07, 2018 6:42 pm Did you ask if there was a fee?
Nope. I am (reasonably) certain there will not be, given the circumstances. And, if a fee is attempted to be assessed, I: (1) will not pay it, and (2) will move the funds elsewhere.
Wouldn't it be easier if you just called and asked.

If they will be charging a fee:
(1) You will have no choice on whether to pay or not, because they will just deduct it from your account.
(2) You will already be out the fee.
In my experience, Fifth Third HSA customer service will have no idea whether there is a fee. They will tell you there is not a fee. You will ultimately be charged a fee. They will credit the fee when you call and complain.

And I'm only half kidding. That's basically what I went through last fall the first time I did a transfer from Fifth-Third to Lively, except that I went through it twice, because they (1) charged an account closure fee even though the account was supposed to remain open and then after crediting that $25 back, they (2) charged a new debit card issuance fee for the debit card that was sent out for the newly-reopened account. They credited that back too. :oops: (They are actually quick on transfers and charge no fees if I leave $25 behind, so I have no further complaints.)
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Re: HSA family max contribution lowered to $6850 for 2018

Post by nps »

Artsdoctor wrote: Wed Mar 07, 2018 6:42 pm Fantastic pick-up on the Bogleheads' part. It is true that the maximum has been decreased so there's no point in waiting to adjust your withholding.
Agreed, glad to get the heads up. Haven't heard anything from my custodian yet.

However, I think it can make sense to wait to adjust withholding. Anyone maxing out through equal and whole dollar payroll contributions might find the process easier if they wait to make the change until they can evenly divide $50 by the number of pay periods remaining in the year. At least that's what I'm doing :happy
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