Does an HSA Rollover Count as a Contribution?

When it comes to Health Savings Accounts (HSAs), there is often confusion around rollovers and contributions. One common question that arises is whether an HSA rollover counts as a contribution.

Let's break it down:

An HSA rollover refers to transferring funds from one HSA to another without taking possession of the money yourself. On the other hand, a contribution is when you add money to your HSA either through your employer, yourself, or someone else on your behalf.

Here's the key difference:

• An HSA rollover does not count towards your annual contribution limit set by the IRS. This means you can rollover funds from one HSA to another without it affecting how much you can contribute in a given year.
• Contributions, on the other hand, do count towards your annual limit. For 2021, the limit is $3,600 for individuals and $7,200 for families. Any contributions you make within these limits will be deducted from your total contribution cap for the year.

It's important to keep track of your contributions to ensure you don't exceed the annual limits and incur any penalties. Rollovers, however, are a helpful way to move funds between HSAs without impacting your contribution cap.

Curious about whether an HSA rollover counts towards your yearly contributions? Let’s clarify this crucial aspect of managing your Health Savings Account.