We just received this very timely update notice from our OCA Benefits partner and wanted to be sure that you were made aware of the HSA reversion contribution for 2018.
HSA FAMILY CONTRIBUTIONS – IRS PROVIDES RELIEF.
Late last week the IRS released Revenue Procedure 2018-27 that allows health savings account (HSA) holders to treat $6,900 (rather than the previously announced in-year decrease to $6,850) as the maximum annual family HSA contribution limit for 2018.
Why did it happen?
In response to Rev. Proc. 2018-18, stakeholders informed the Treasury Department and the IRS that implementing the $50 reduction to the limitation on deductions for individuals with family coverage would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders noted that some individuals with family coverage under an HDHP made the maximum HSA contribution for the 2018 calendar year before the issuance of Rev. Proc. 2018-18 reducing the deduction limitation, and that many other individuals made annual salary reduction elections for HSA contributions through their employers’ cafeteria plans based on the $6,900 limit for an individual with family coverage under an HDHP. In response to these concerns, the Treasury Department and the IRS have determined that it is in the best interest of sound and efficient tax administration to allow taxpayers to treat the $6,900 annual limitation originally published in Rev. Proc. 2017-37 as the 2018 inflation adjusted limitation on HSA contributions for eligible individuals with family coverage under an HDHP.
To read the entire IRS announcement go to: www.irs.gov/pub/irs-drop/rp-18-27.pdf
Should you have any additional questions, please contact our office.