Are HSA Contributions Subject to Social Security Tax? | HSA Awareness

Health Savings Accounts (HSAs) have gained popularity as a tax-efficient way to save for medical expenses. One common question that arises is whether HSA contributions are subject to Social Security tax.

Contrary to popular belief, HSA contributions are not subject to Social Security tax. Here's why:

• HSAs are funded with pre-tax dollars, meaning that contributions are made before Social Security tax is deducted.
• Employee HSA contributions are also exempt from Medicare tax.
• Employer contributions to an employee's HSA are excluded from the employee's gross income, making them free from Social Security tax.

It's important to note that while HSA contributions are not subject to Social Security tax, any earnings or interest accrued in the account may be subject to taxation if withdrawn for non-medical expenses before retirement age.

In summary, HSA contributions enjoy tax advantages, including exemption from Social Security tax, making them a valuable tool for saving for healthcare expenses.

Health Savings Accounts (HSAs) are an incredible tool for individuals looking to save smartly for their healthcare needs. Did you know that contributions to HSAs are exempt from Social Security taxes? This means more of your hard-earned money goes directly into your savings!