HSA Contribution Limit - Employer Seed/Contribution?

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dabretty
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HSA Contribution Limit - Employer Seed/Contribution?

Post by dabretty » Tue Sep 10, 2019 2:14 pm

Quick question. I've seen varying answers out there on the web as well as through the account's documentation.

The 2019 HSA family maximum contribution limit to an HSA is $7,000. Does an employer's "seed money" ($1,000 in my case) count against this limit, or is this limit just for what I/we contribute?

I ask, as we are currently on autopilot to contribute $7,000 ourselves (before the seed) ... and I'd like to avoid over-contribution penalties!

Thanks.

magicrat
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by magicrat » Tue Sep 10, 2019 2:18 pm

Yes, it counts.

Topic Author
dabretty
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by dabretty » Tue Sep 10, 2019 2:20 pm

Thanks magicrat. I'll have to get my wife to make the adjustment in their payroll system.

bene1
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by bene1 » Tue Sep 10, 2019 2:45 pm

magicrat wrote:
Tue Sep 10, 2019 2:18 pm
Yes, it counts.
+1. It counts.

One thing to watch out for. My employer does not show their contribution on my W-2. I need to manually deal with it at tax time because it does count against the limit. May or may not apply to you.

livesoft
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by livesoft » Tue Sep 10, 2019 2:50 pm

Note the limit is also age-based, so if you or your spouse are 55 or older then there is an additional $1,000 for each oldster I think.

Hmmm, my spouse has an HSA but has never logged in to her HSA to see what's going on. Maybe I can get her to take a look tonight.
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MP123
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by MP123 » Tue Sep 10, 2019 7:16 pm

livesoft wrote:
Tue Sep 10, 2019 2:50 pm
Note the limit is also age-based, so if you or your spouse are 55 or older then there is an additional $1,000 for each oldster I think.
This is correct. There is an additional $1k catch up contribution for age 55+.

It needs to go into the HSA belonging to the person over 55, so if both spouses are 55+ you'll need to have a separate HSA for each to make both catch up contributions in addition to the family maximum.

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dabretty
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by dabretty » Mon Sep 16, 2019 6:33 pm

Just a quick follow-up. We've adjusted our contribution rate such that we'll top out at $6k (and employer seed of $1k takes us to $7k).

But wow is this a big ball of confusion for people. The HR services website my wife's company uses (alight.com) has a "tax information" summary that only reflects the employee's (direct) contributions for the year - in no way do they reflect the seed. The seed can only be seen in a transaction log. It's very easy to imagine the IRS misreporting that is occurring due to this.

I'm glad that I checked with this community. Thanks as always!

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grabiner
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Re: HSA Contribution Limit - Employer Seed/Contribution?

Post by grabiner » Mon Sep 16, 2019 6:50 pm

bene1 wrote:
Tue Sep 10, 2019 2:45 pm
One thing to watch out for. My employer does not show their contribution on my W-2. I need to manually deal with it at tax time because it does count against the limit. May or may not apply to you.
And it needs to be entered on the Form 8889 so that your contributions match up with the IRS's records.

This applies most often to US Government employees, because the contribution is made by the government plan, not directly through payroll. If you aren't eligible for an HSA, you can still use a HDHP, but the plan will create a Health Reimbursement Agreement for you rather than contributing to an HSA. Therefore, the government payroll office doesn't know whether the contribution was made. (If you also contribute to the HSA by payroll deduction, that part of the contribution will be reported in your W-2.)
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