How Do I Know If I Overcontributed to My HSA?

💡 Overcontributing to your Health Savings Account (HSA) can lead to IRS penalties—but there’s a way to fix it! Here’s what you need to know.

How Do I Know If I Overcontributed to My HSA?

The IRS sets annual contribution limits for HSAs. If you exceed this limit, the extra funds are subject to a 6% excise tax each year they remain in your account.

HSA Contribution Limits for 2024:

• Individual Coverage: $4,150
• Family Coverage: $8,300
• Catch-Up Contribution (Age 55+): Additional $1,000

🚨 Common Reasons for Overcontributions:
✔ Employer and personal contributions exceeded the limit
✔ Mid-year changes in coverage (e.g., switching from family to individual)
✔ Mistaken double contributions

How to Correct an HSA Overcontribution

✅ Option 1: Remove Excess Contributions Before the Tax Deadline

• Contact your HSA provider and request a corrective withdrawal before April 15 of the following tax year.
• Any earnings on the excess funds must also be withdrawn.

✅ Option 2: Apply the Excess to Next Year’s Contributions

• If you don’t withdraw the extra funds before the tax deadline, the IRS allows you to apply the overage to next year’s contribution limit.
• However, the 6% penalty still applies for the year of overcontribution.

✅ Option 3: Pay the 6% Penalty

• If the extra funds remain in your account, the IRS charges a 6% excise tax every year the overcontribution stays.
• This is not ideal since the tax compounds annually.

How to Avoid Future HSA Overcontributions

💡 Keep track of all contributions (including employer deposits).
💡 Adjust contributions if switching from family to individual coverage.
💡 Use tax software or a financial planner to ensure compliance.

Need Help?

For a detailed guide on removing excess HSA contributions, visit our blog post:
👉 Excess HSA Contributions? How to Get Them Removed