Does HSA Maximum Include Employer Contribution?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. One common question that arises is whether the HSA maximum includes employer contributions. Let's dive into this topic to gain a better understanding.

Employers can contribute to an employee's HSA, and these contributions are excluded from the employee's taxable income. However, it's essential to note that the HSA maximum does include both individual and employer contributions combined. The total contribution limit is set annually by the IRS and is subject to change.

When determining your maximum HSA contribution for the year, you need to consider both your own contributions and any contributions made by your employer. If the combined total exceeds the annual limit set by the IRS, you may face penalties for over-contributions.

When considering your HSA contributions, it's essential to note that employer contributions count towards the IRS-established maximum limits. This means that for 2021, the combined total from you and your employer must not exceed $3,600 for individuals or $7,200 for families.