What is a Contribution Defined as for HSA? - Understanding HSA Contributions

When it comes to HSA accounts, a contribution is the amount of money that you or your employer puts into your HSA account.

Contributions to your HSA are typically tax-deductible, meaning you can deduct them from your taxable income, lowering your overall tax liability.

Here are some key points to remember about HSA contributions:

• You can make contributions to your HSA, your employer can make contributions, or both can contribute to your HSA account.
• HSAs have contribution limits set annually by the IRS. For 2021, the contribution limit for individuals is $3,600 and for families is $7,200.
• If you are 55 or older, you can make an additional catch-up contribution of $1,000 per year.

It's important to be aware of these contribution limits to avoid any penalties for over-contributing to your HSA account.

When we talk about HSA accounts, making a contribution essentially means adding funds to your account, either from your pocket or through your employer, to cover qualified medical expenses.