How to Calculate HSA Contribution When Working Part of the Year

If you only work part of the year and want to figure out your HSA contribution, there are a few things to consider to ensure you make the most of your health savings account.

First, determine your annual HSA contribution limit based on your coverage type: individual or family. For 2021, the limits are $3,600 for individual coverage and $7,200 for family coverage. If you are eligible to contribute to an HSA for only part of the year, your contribution limit will be prorated based on the number of months you are covered by an HSA-qualified high-deductible health plan (HDHP).

To calculate your prorated HSA contribution, follow these steps:

1. Identify the number of months you will be covered by an HDHP and eligible to contribute to an HSA for the year.
2. Divide this number by 12 to determine the percentage of the annual contribution limit you can contribute.
3. Multiply the annual contribution limit by this percentage to find your prorated contribution limit.

If you find yourself working only part of the year, calculating your HSA (Health Savings Account) contributions doesn't have to be a daunting task. It's essential to understand your annual contribution limits to make the most out of your account.