The Internal Revenue Service (IRS) has announced that it will restore “the 2018 HSA family contribution limit to $6,900, the amount originally announced in May 2017 before being reduced”.
The announcement comes in response to negative commentary received regarding the decision.
Barley Snyder highlights that:
[T]he IRS notes that some individuals had already made the maximum HSA contribution for the 2018 calendar year before the limit was reduced on March 2 and that many other individuals made annual salary reduction elections for HSA contributions through their employers’ cafeteria plans based on the $6,900 limit announced in 2017. The IRS also acknowledged comments suggesting that the costs of modifying various systems to reflect the reduced maximum, as well as the costs associated with distributing a $50 excess contribution and related earnings, would be significantly greater than any tax benefit associated with an unreduced HSA contribution.
Employers are advised to review any changes made to payroll deductions to ensure they are in compliance with the adjustment.
For more details, please click here.
The information included in this blog post originally appeared in an article from Barley Synder on May 1, 2018, written by David J. Ledermann.