How Much Can I Contribute to an HSA If I Opened It Midyear?

If you opened an HSA midyear, you may wonder how much you can contribute to it. The contribution limit for an HSA is determined by the IRS and is prorated based on the number of months you are eligible to contribute for the year.

For 2021, the annual contribution limit for individuals with self-only coverage is $3,600, and for those with family coverage, it's $7,200. However, if you opened your HSA midyear, you are only eligible to contribute a portion of these limits based on the number of months you have an HSA-eligible health insurance plan.

Here's how you can calculate your prorated HSA contribution limit:

• Determine the full annual contribution limit based on your coverage type.
• Divide the full annual limit by 12 to get the monthly limit.
• Multiply the monthly limit by the number of months you are eligible to contribute for the year.

It's essential to note that to contribute to an HSA, you must be covered by an HSA-eligible high-deductible health plan (HDHP) and not be enrolled in Medicare. Additionally, contributions to an HSA can be made until the tax filing deadline for the year, usually April 15 of the following year.

If you opened your Health Savings Account (HSA) midyear, you might be curious about your contribution limits. The IRS sets these limits, and they are prorated according to how many months you were eligible during the year.