IRS Provides Relief from Decrease in Maximum Annual HSA Contribution
Thursday, April 26, 2018
The Tax Cuts and Jobs Bill enacted late last year changed in the way the IRS was to calculate cost-of-living increases. Revenue Procedure 2018-18 released on March 3, 2018, provided these new recalculated limitations - including a reduction in the maximum family HSA contribution for those with family coverage under an HDHP from $6,900 (as previously announced in Rev. Proc. 2017-37 on May 4, 2017) to a new limit of $6,850. Stakeholders (including ECFC) and members of Congress contacted the IRS and the Treasury Department requesting relief from the reduction in the maximum family HSA contribution limit.
Today, the IRS released Revenue Procedure 2018-27 which provides that for 2018, taxpayers may treat $6,900 (rather than $6,850) as the maximum annual family HSA contribution limitation. The Rev. Proc. also provides guidance on how to handle distributions from an HSA which were meant to reduce a contribution of $6,900 to the $6,850 contribution amount announced in Rev. Proc. 2018-18. This Rev. Proc. states that an individual who has received a corrective distribution may (but is not required to) repay the contribution to the HSA up to the $6,900 amount.
Link to Rev. Proc. 2018-27
William F. Sweetnam, Jr
ECFC Legislative and Technical Director