Does Employer Contribution to HSA Count Towards Limit 2020?

Health Savings Accounts (HSAs) are a valuable financial tool that can help individuals save for medical expenses while enjoying tax benefits. One common question that often arises is whether employer contributions to an HSA count towards the annual contribution limit for the year 2020.

Employer contributions to an HSA do count towards the annual contribution limit set by the IRS. In 2020, the maximum contribution limit for an individual with self-only coverage is $3,550, while for those with family coverage, it is $7,100. This limit includes both individual contributions and any employer contributions made to the HSA.

It is essential for individuals to be aware of this limit when contributing to their HSA to avoid exceeding the allowed amount. Excess contributions can result in penalties and tax implications, so it is crucial to stay within the set limits.

When considering the benefits of Health Savings Accounts (HSAs), many people wonder if employer contributions to these accounts are included in the annual limit set by the IRS. In 2020, it's important to note that employer contributions do count towards both the self-only and family coverage limits, which stand at $3,550 and $7,100 respectively.