IRS announces relief for HSA contribution limit error

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pshonore
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IRS announces relief for HSA contribution limit error

Post by pshonore » Thu Apr 26, 2018 4:08 pm

Revenue Procedure 2018-27 provides relief for taxpayers with family coverage under high deductible health plans (HDHPs) concerning the annual deductible contributions limit for their 2018 health savings accounts (HSAs) under Internal Revenue Code section 223. The maximum for family coverage was originally issued as $6,900 on May 4, 2017. On March 2, 2018, the limit was reduced to $ 6,850 for taxpayers with family coverage under HDHPs pursuant to Tax Reform legislation that changed the calculation for 2018 and future years. This guidance allows taxpayers to continue to treat the 2018 limit as $6,900. It also provides clarifications on how taxpayers who already received a distribution from an HSA of an excess contribution based on the $6,850 deduction limit may treat the distribution as a mistake and repay the HSA without any tax or reporting consequences. It also clarifies how to treat a distribution of an excess contribution (and earnings) based on the $6,850 deduction limit.

https://www.irs.gov/pub/irs-drop/rp-18-27.pdf

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MP123
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Re: IRS announces relief for HSA contribution limit error

Post by MP123 » Thu Apr 26, 2018 4:26 pm

Thanks for posting that!

So I gather the 2018 limit is back to $6900 (with $1000 catch up if over 55). And that you can re-contribute the $50 you may have had to ask your HSA custodian to withdraw as an excess contribution if you jumped the gun when they announced the lower limit.

Quite a SNAFU.

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indexfundfan
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Re: IRS announces relief for HSA contribution limit error

Post by indexfundfan » Thu Apr 26, 2018 4:38 pm

Oh great. Now those HSA administrators who made the change to $6850 now has to make another change back to $6900. :oops:
My signature has been deleted.

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Epsilon Delta
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Re: IRS announces relief for HSA contribution limit error

Post by Epsilon Delta » Thu Apr 26, 2018 6:01 pm

While this is certainly a SNAFU, it is only FUBAR for the people who tried to take corrective action between the March announcement of the the $6,850 limit and the recent announcement of relief. Thus demonstrating once again that there is no situation so dire that quick, decisive action cannot make it worse.

nps
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Re: IRS announces relief for HSA contribution limit error

Post by nps » Thu Apr 26, 2018 6:09 pm

I made a note to deal with this in July. Guess I can throw that away.

Wonder if prepaid property tax relief is on the way as well...

BruinBones
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Re: IRS announces relief for HSA contribution limit error

Post by BruinBones » Thu Apr 26, 2018 7:58 pm

My HSA made it pretty easy for my monthly contributions to adjust to $6850.
Here's hoping it is just as easy to adjust back.

mhalley
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Re: IRS announces relief for HSA contribution limit error

Post by mhalley » Thu Apr 26, 2018 8:08 pm

After I already withdrew the “excess” contribution. :oops:

doneat53
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Re: IRS announces relief for HSA contribution limit error

Post by doneat53 » Thu Apr 26, 2018 8:28 pm

Appreciate this post. I was just looking into reclaiming my 50 dollar overcontribution today. Good news!

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