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June 10, 2024

IRS releases Health Savings Account limits for 2025

In Revenue Procedure 2024-25, the IRS announced the inflation adjustments that will apply to Health Savings Accounts (HSAs) under IRC Section 223 effective for calendar year 2025.

 Health savings account limit type



Contribution *


Self (IRC Section 223(b)(2)(A))



Family (IRC Section 223(b)(2)(B))





Self (IRC Section 223(c)(2)(A))



Family (IRC Section 223(c)(2)(A))



Deductible (high-deductible health plan)


Self (IRC Section 223(c)(2)(A))



Family (IRC Section 223(c)(2)(A))



*An additional contribution of $1,000 is permitted for individuals aged 55 and older. An individual enrolled in Medicare may not contribute to an HSA. For plan years beginning in 2025, the maximum amount that may be made newly available for the plan year for an excepted Health Reimbursement Arrangement (HRA) under Treas. Reg. Section 54.9831-1(c)(3)(viii)(B)(1) is $2,150.

Form W-2 reporting reminder

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 on Form W-2, boxes 1, 3 (up to the Social Security limit) and 5 (2024 Form W-2 instructions, page 12). Additionally, excess contributions to an HSA are subject to an excise tax.

Ernst & Young LLP insights

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 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 might 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.

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor