11 May 2018 Health Savings Accounts limits for 2018 and 2019 In Revenue Procedure 2018-30, the IRS announced the 2019 inflation adjustments that will apply to Health Savings Accounts (HSAs) under IRC Section 223 effective for calendar year 2019.
*Additional contribution of $1,000 is permitted for individuals age 55 and older. Those enrolled in Medicare are not eligible to participate. ** In Revenue Procedure 2018-27, the IRS announced that the limit on annual contributions for individuals with family coverage in a health savings account (HSA) may be treated as $6,900, rather than the $6,850 announced earlier this year in Revenue Procedure 2018-18. Employer contributions and employee pre-tax contributions to an HSA are required to be reported on Form W-2, box 12, Code W. Employer and employee pretax contributions, that when combined exceed the annual calendar year limit, are required to be treated as taxable wages and reported in Form W-2, boxes 1, 3 (up to the Social Security limit) and 5. (2018 Form W-2 instructions, page 11; IRS Publication 969)) HRA and HSA-eligible health plans constitute what are called "consumer-driven" health plans (CDHPs) because they give employees the choice of electing health plan options that best meet their projected out-of-pocket medical expenses. CDHPs also raise payroll challenges because the rules governing each of these medical reimbursement account options (FSA, HRA, HSA and MSA) are unique in terms of their tax treatment and reporting. How companies name their health plans may not clearly communicate the type of medical reimbursement vehicle that applies, causing time-consuming and potentially costly errors in payroll system configurations. To avoid year-end reporting complications, now is a good time to review employee elections and how they are being handled in your payroll system. Ask us how we can help you to confirm you payroll tax system configurations with TaxAbility.™
Document ID: 2018-0995 | |||||||||||||||||||||||||||||||||||||||
