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HSA contribution limits to increase in 2021By: National Association of Tax Professionals
June 16, 2020

This month, the Internal Revenue Service (IRS) issued its annual inflation adjustment for health savings accounts (HSAs) for 2021.

According to Revenue Procedure 2020-32, for individuals with self-only coverage under a high deductible plan, the annual limitation on deductions is $3,600. This figure is up $50 from this year’s $3,550.

For an individual with family coverage under a high deductible health plan, the annual limitation on deductions is $7,200, up $100 from this year’s $7,100.

For calendar year 2021, a high-deductible health plan is defined as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage.

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According to the IRS, in response to the coronavirus pandemic, high-deductible health plans can cover the costs of COVID-19 testing and treatment before the deductible is met. The CARES Act also allows the use of an HSA or a flexible spending account to pay for over-the-counter drugs without a prescription. In addition, the CARES Act allows the use of HSAs for telehealth/remote care services until Dec. 31, 2021.

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penAbout National Association of Tax Professionals

The National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.

The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.

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