As is usual this time of the year the IRS advises the tax practitioner community and taxpayers of the upcoming 2023 H.S.A. Contribution limits for the upcoming 2023 (done in 2022) tax year. This year affected by =the high inflation numbers.
The maximum contribution to a health savings account and certain related benchmarks will be sharply higher next year, reflecting inflation-linked adjustments.
The IRS announced the updated amounts Friday in Rev. Proc. 2022-24, as it does each year under Sec. 223(g). The revenue procedure also includes the revised maximum amount that may be made newly available for excepted-benefit health reimbursement arrangements (HRAs) under Regs. Sec. 54.9831-1(c)(3)(viii).
HSA contributions
The 2023 maximum contribution that may be made for calendar 2023 by an individual with self-only coverage will be $3,850, representing a $200 increase from 2022, four times the adjustment from 2021 to 2022. For an individual with family coverage, the maximum contribution will be $7,750, which is $450 higher than the current limit of $7,300.
Unchanged because it is set by statute (Sec. 223(b)(3)) is the $1,000 “catch-up” additional contribution that may be made by individuals who are age 55 or older before the end of the tax year.
An eligible individual may make limited annual cash contributions to an HSA to pay the qualified medical expenses of account beneficiaries, up to the annual sum of monthly limitations for months during the tax year in which the individual is eligible.
HDHP amounts
With either type of coverage, an eligible individual must be covered under a high-deductible health plan (HDHP) (and may not be covered under any other health plan that provides coverage for any benefit that is covered under the HDHP). The minimum annual deductible amount and maximum out-of-pocket amounts of HDHPs are also adjusted for inflation.
For 2023, a qualifying HDHP must have an annual deductible of at least $1,500 for self-only coverage ($100 higher than for 2022) or $3,000 for family coverage (a $200 increase). In addition, annual out-of-pocket expenses, including deductibles, co-payments, and other amounts exclusive of premiums may not be more than $7,500 for self-only coverage or $15,000 for family coverage — increases, respectively, of $450 and $900.
Excepted-benefit HRA maximum
For plan years beginning in 2023, the maximum amount that may be made newly available for an excepted-benefit HRA under Regs. Sec. 54.9831-1(c)(3)(viii) is $1,950, which is $150 higher than the 2022 amount of $1,800.