This is an update to our March blogpost, where we alerted employers that the 2018 family HSA contribution limit was lowered from $6,900 to $6,850 due to the Tax Cuts and Jobs Act making an inflation adjustment. The IRS is reversing course now for a second time, and the family HSA contribution limit will again be $6,900 for 2018. The IRS cited administrative and financial burdens for allowing the original limitation.
Employers that have already taken steps to notify their employees of the original change to the annual limitation will want to alert them of this revision. An individual that was returned part of their contribution due to the former IRS guidance will not include the amount in their gross income, unless the distribution is attributable to employer contributions that were not included in the employee’s wages, and may repay the distribution (including earning) to the HSA.
