HSA Contribution Limits for 2025 and 2026: A Clear Guide for Individuals, Families, and Retirees

November 28, 2025

Health Savings Accounts (HSAs) play an important role in planning for out-of-pocket medical expenses and long-term health costs. Each year, the IRS updates the contribution limits, eligibility rules, and HDHP requirements. Understanding these changes helps you plan your health spending, taxes, and retirement strategy with fewer surprises.

Below is a clear overview of the limits for 2025 and 2026, how to calculate what you can actually contribute, and the rules that matter for individuals, families, employers, and those preparing for retirement.

What an HSA Is and How It Works

A Health Savings Account is a tax-advantaged account you can use to save and invest money for future medical expenses. You qualify for an HSA only if you’re enrolled in an HSA-eligible High Deductible Health Plan. The IRS sets the HSA contribution limits each year, which is why understanding the 2025 and 2026 HSA contribution limits matters when you’re planning ahead.

Your HSA has three important tax benefits:

Your contributions reduce your federal taxable income.
You get this benefit whether you add money through payroll or directly through your HSA custodian.
Your growth is not taxed if used for qualified medical expenses.
This includes interest, dividends, and investment gains.
Your withdrawals for qualified expenses are not taxed.
This applies during your working years and throughout retirement.

An HSA is different from a Flexible Spending Account because the balance stays with you. The funds roll forward every year, and you can keep the account even if you change employers, switch health plans, or retire. Once you’re enrolled in Medicare, contributions stop, but you can still use the account for a broad list of medical costs, including Medicare premiums.

For many households, the HSA functions as both a medical reserve and a long-term planning tool, especially when coordinated with IRAs, 401(k)s, and Social Security decisions.

Quick Summary of HSA Contribution Limits

You might only need the numbers, but understanding how these limits fit together can help you make more accurate decisions about your health coverage, taxes, and retirement planning. Below is a clear snapshot of what you can put into an HSA for 2025 and 2026, why these figures matter, and what you need to watch closely when calculating your own HSA max contribution.

2025 HSA Contribution Limits

1. Self-only coverage: $4,300

This applies if you’re the only person covered under your HSA-eligible plan
This figure includes your payroll contributions, direct deposits, and employer funding
If you’re managing your tax bracket or planning medical expenses for the year, this limit is the anchor point

2. Family coverage: $8,550

This applies if your plan covers you and at least one other person
Your household shares this limit
Families with high expected medical costs often reach this threshold earlier than expected
Employer HSA contributions are included in the $8,550 figure, not separate from it

3. Age 55 and older: catch-up contribution of $1,000

You can add this amount once you turn 55
The timing of your birthday does not change the catch-up amount
The catch-up must be deposited into your own HSA, not your spouse’s
If both you and your spouse are 55 or older, each of you needs a separate HSA to use the catch-up rules correctly

2026 HSA Contribution Limits

1. Self-only coverage: $4,400

This is a small increase compared to 2025 and reflects higher health care costs
You can use this figure for long-term tax planning when estimating future contributions
If you’re building multi-year projections, include this updated limit when forecasting out-of-pocket medical spending

2. Family coverage: $8,750

This is the HSA max contribution for households in 2026
Applicable even if only one spouse is making contributions
If your employer adds funds for both spouses, those dollars come out of the same $8,750 cap
Spousal contributions still follow IRS household rules, not per-person rules

3. Catch-up contribution: $1,000

This stays the same in 2026
The catch-up amount does not adjust with inflation
You can continue adding it each year until you enroll in Medicare
Some individuals use the catch-up to build an HSA reserve specifically for Medicare Part B, Part D, and other retirement health needs

How Employer Contributions Affect Your Limits

Employer contributions count toward your HSA contribution limits for both 2025 and 2026. This includes:

Direct employer HSA deposits
Employer seed funding at the start of the year
Wellness rewards deposited into the HSA
Matching contributions based on payroll deposits

Example

If you’re enrolled in self-only coverage in 2025 and your employer contributes $1,200, your personal limit becomes:

$4,300 minus $1,200
Resulting in a personal contribution limit of $3,100

Why this matters for you

It keeps you from unintentionally exceeding HSA contribution limits
It helps you avoid the 6 percent excise penalty associated with overfunding
It influences your year-end tax strategy if you’re adjusting contributions through payroll

Why These Limits Matter for Your Financial Plan

1. Tax planning

Your HSA contributions reduce your federal taxable income
Higher limits in 2026 give you more room if you’re projecting higher health expenses
If you’re optimizing your tax bracket, these figures help you adjust your year-end contributions

2. Retirement planning

HSAs are one of the few accounts with tax advantages at contribution, during growth, and during withdrawals for qualified expenses
Your ability to contribute the full amount in 2025 and 2026 supports your long-term health funding strategy
If you’re retiring in the next few years, the catch-up provision can help accelerate your HSA reserves

3. Household planning

Family limits apply to the entire household
If both spouses contribute, coordination prevents mistakes
The catch-up rules require separate HSAs when both spouses are 55 or older

4. Employer coordination

Employers often contribute early in the year
If you adjust your coverage mid-year, knowing these limits prevents contribution miscalculations
You may need to adjust your payroll deductions once employer amounts are finalized

Source: IRS Contribution Limits 2025 – 2026

Why HSAs Matter for Individuals and Retirees

When you look at HSA contribution limits for 2025 and 2026, the numbers only tell part of the story. The real value comes from how you use the account. HSAs give you benefits during your working years, during the transition to retirement, and during retirement itself. If you’re trying to reduce taxes, prepare for future medical costs, or build a more efficient withdrawal plan, your HSA can support your financial strategy in ways other accounts cannot.

1. Federal tax reduction at contribution

Your HSA deposits lower your federal taxable income. This can help you:

Reduce the tax impact of year-end bonuses
Offset part of your adjusted gross income if you expect higher income for the year
Manage your tax bracket if you are close to a phaseout threshold
Coordinate with other tax-efficient tools such as Roth IRAs or traditional 401(k)s

If you’re self-employed or run a small business, HSA contributions also give you a direct reduction in taxable income without requiring a complicated plan design.

2. Tax-free withdrawals for qualified medical expenses

Withdrawals for qualified medical expenses are not taxed. This structure supports you when you have:

Prescription drug costs
Specialist visits
Imaging and diagnostic work
Vision needs such as glasses or contacts
Dental procedures that your insurance may not fully cover
Costs related to chronic health issues

If you’re preparing for retirement, this feature becomes more valuable because health expenses tend to grow as you get older. Many individuals use their HSA as a medical reserve that covers unpredictable bills without affecting taxable income for the year.

3. Year-over-year rollover and long-term growth potential

Your unused HSA funds carry into the next year. Your balance stays with you when you change employers or retire. Because HSAs can hold cash or investments, you can structure the account in a way that fits your risk tolerance and time horizon. If you’re keeping the account active for long-term medical costs, the rollover structure gives you flexibility without time pressure to spend the funds.

Here are some strategic uses of rollover money:

Building a reserve for Medicare Part B, Part D, and Medicare Advantage premiums
Preparing for dental work that often becomes necessary in your 60s and 70s
Planning for hearing aids and related evaluations
Covering long-term care expenses that traditional health insurance does not cover

Your HSA balance can serve as a dedicated medical bucket, separate from your retirement income sources.

4. Planning benefits for individuals who are close to retirement

If you are within five to ten years of retiring, your HSA can help you:

Reduce taxable income while you’re still earning
Build a pool of tax-free funds for future health care
Offset the rising cost of prescriptions
Prepare for large expenses such as joint replacements or dental implants
Pay for qualified long-term care services out of your HSA balance

Your ability to use the catch-up contribution once you turn 55 allows you to accelerate your HSA growth during the years when medical costs start to become more predictable.

5. Why HSAs matter for employers

Employers who understand HSA rules can design more effective benefit packages. When you’re running payroll or managing a benefits team, HSA rules affect:

How you structure employer contributions
How staff coordinates payroll deductions with employer funding
What employees expect during open enrollment
How to support workers who switch between self-only and family coverage
Annual communication around HSA contribution limits and eligibility rules

You can help employees reduce taxes and prepare for long-term medical costs, which improves overall financial resilience.

6. Why HSAs matter for long-term financial planning

Your HSA can help support a broader strategy because it interacts with multiple financial components. When you combine the HSA rules with other tools, you have more control over your retirement plan.

Examples include:

Using HSA withdrawals in retirement so you can leave IRA assets invested longer
Reducing withdrawals from taxable accounts when unexpected medical bills arise
Paying long-term care insurance premiums from your HSA within IRS limits
Coordinating HSA withdrawals with Social Security claiming strategies
Reducing pressure on your cash flow during the Medicare enrollment transition

If you’re planning for retirement across multiple accounts, your HSA is one of the few tools that gives you tax advantages at contribution, during growth, and during qualified withdrawals.

Want guidance on how to fit your HSA into a full retirement plan?

If you want a plan that coordinates your HSA with Social Security, Medicare, IRAs, 401(k)s, and long-term care strategies, our team at Landsberg Bennett Private Wealth Management can help walk you through it.

A brief consultation can show you how to use your HSA more effectively and help shape a retirement plan that supports your long-term goals.

Book a consultation with us to get started.

HSA Contribution Limits (2020–2026 Table)

This longer look-back period gives you context for how HSA contribution limits have changed over time. When you study year-by-year adjustments, you can see how inflation, medical cost trends, and IRS indexing rules shape the HSA contribution limits you use today. If you’re planning for future medical expenses or adjusting contributions across multiple accounts, these historical figures help you build more accurate long-term projections.

Year	Self-Only Limit	Family Limit	Catch-Up (55+)
2020	$3,550	$7,100	$1,000
2021	$3,600	$7,200	$1,000
2022	$3,650	$7,300	$1,000
2023	$3,850	$7,750	$1,000
2024	$4,150	$8,300	$1,000
2025	$4,300	$8,550	$1,000
2026	$4,400	$8,750	$1,000

Source: IRS Publication 969

How to read this table

You’re looking at three key amounts for each year:

Self-only limit
Family limit
Catch-up contribution for age 55 and older

These numbers determine how much you can set aside for qualified medical expenses under IRS rules. They also influence employer benefit design, tax planning, and retirement preparation.

Why the table matters for your planning

You can see how steady the IRS has kept the $1,000 catch-up contribution
You can compare self-only and family coverage patterns across multiple years
You can spot the years when contribution limits jumped more than usual
You can run multi-year savings estimates using historical HSA data
You’re able to coordinate your HSA contribution strategy with your retirement planning timeline

Key trends you should pay attention to

1. Gradual increases from 2020 through 2026

The IRS raised the self-only limit each year from $3,550 in 2020 to $4,400 in 2026. Family limits rose from $7,100 to $8,750 during that same period. These adjustments reflect higher medical costs and broader inflation trends.

2. Catch-up contributions remain fixed

The catch-up amount stayed at $1,000 every year from 2020 to 2026. This is useful if you’re building a multi-year health care reserve. You can rely on the same catch-up number when you’re forecasting HSA contributions for the year you turn 55 and for the years before Medicare enrollment.

3. HSA growth opportunities increase with rising limits

Higher HSA contribution limits for 2025 and 2026 give you the ability to set aside more tax-advantaged money for future qualified medical expenses. If you’re preparing for retirement, you can use these higher limits to build a larger medical fund for Medicare premiums, out-of-pocket costs, long-term care needs, and prescriptions.

4. Historical limits help when you’re adjusting payroll contributions

If your employer funds part of your HSA, these historical numbers help you understand:

How your employer’s contribution fits into annual IRS limits
When you may need to reduce payroll deductions to avoid overfunding
How to structure year-end contributions to stay within HSA rules

5. Year-by-year data supports long-term retirement planning

Financial planning often spans multiple decades. When you map out future health expenses, this table lets you see how quickly HSA contribution limits tend to move. You can plug these historical figures into projections for medical spending, Roth conversion planning, Social Security coordination, and withdrawal sequencing.

How individuals use this table

You can estimate how much you would have saved if you had contributed to the HSA every year since 2020
You can compare your own contribution history with IRS limits to find unused opportunities
You can plan how much to allocate toward 2025 and 2026 limits based on previous patterns

How employers use this table

You can design predictable HSA funding policies
You can communicate annual changes to employees during open enrollment
You can structure matching formulas that stay aligned with IRS contribution limits
You can plan payroll deduction schedules with fewer adjustments later in the year

2025 HSA Contribution Limits: Detailed Breakdown

The 2025 HSA contribution limits create a clear structure for how much you can set aside for qualified medical expenses. Understanding these amounts helps you manage taxes, plan for future health costs, and coordinate contributions with your employer. The limits apply whether you contribute through payroll deductions or direct deposits.

Self-Only Coverage: $4,300 in 2025

If you have self-only HSA-eligible coverage, you can contribute up to $4,300 for the year. This amount covers every dollar that flows into your HSA from you and your employer. You can schedule contributions through payroll or deposit directly to your HSA custodian. If your cash flow changes during the year, you can adjust the contribution pace at any time to stay on track.

What this amount means for you

You can use this limit for tax planning during open enrollment
You can structure contributions around expected medical expenses
If you expect higher income late in the year, you can contribute more to lower taxable income
You can coordinate HSA deposits with traditional or Roth retirement contributions when building your tax strategy

Family Coverage: $8,550 in 2025

If your plan covers you and at least one other person, your HSA max contribution for 2025 is $8,550. This limit applies to the household, not per person. That means you and your spouse share the same cap even if both of you contribute through separate payrolls.

How families typically use the 2025 limit

You may front-load contributions early in the year if you have scheduled medical procedures
You can hold back on excess payroll contributions once employer funding is finalized
You can split contributions between spouses to match cash flow needs
You can project medical expenses for children, dental needs, and orthodontic work and decide how much to reserve

Catch-Up Contribution for Age 55 and Older: $1,000

If you turn 55 during 2025, you qualify for the $1,000 catch-up contribution. The IRS gives you the full catch-up for the year even if your birthday is late in the year. This is helpful if you are preparing for Medicare enrollment or building a medical reserve for retirement.

Important details to remember

The catch-up amount goes into your own HSA, not your spouse’s
If both spouses are 55 or older, each must have a separate HSA to use the catch-up
The catch-up amount does not adjust for inflation
Many individuals use the catch-up to prepare for future Medicare premiums, out-of-pocket costs, and long-term care needs

Employer Contributions Count Toward Your 2025 Limits

Your employer’s HSA funding is part of your total 2025 HSA contribution limit. These dollars reduce the amount you can add from your own income. This is true whether your employer deposits funds monthly, quarterly, or at the start of the year.

Employer contributions include

Seed funding at the beginning of the year
Wellness program deposits
Matching contributions based on payroll
Monthly fixed contributions

Example of How the 2025 Limit Works

If you have self-only coverage in 2025:

Total allowed: $4,300
Employer contribution: $1,200
Your personal limit becomes: $3,100

This example shows why it is important to track employer deposits closely. If your employer adjusts contribution timing during the year, you may need to recalibrate your own deposits.

Turning Age 55 Mid-Year

You receive the full catch-up contribution for the entire year even if your birthday is late. For example, if you turn 55 in December, you are still eligible for the full $1,000 catch-up for 2025.

How this can help you

You can increase your HSA contributions late in the year to reach the catch-up limit
You can combine the catch-up with your standard HSA limit to build a medical reserve quickly
You can use the catch-up to offset rising prescription costs or prepare for Medicare Part B and Part D

If you want, I can expand the 2026 breakdown next with the same structure and tone.

2026 HSA Contribution Limits: Detailed Breakdown

The 2026 HSA contribution limits give you more room to set aside tax-advantaged dollars for future medical costs. If you’re building a long-term plan or adjusting contributions based on rising health expenses, these new limits shape how much you can move into your HSA for the year.

Self-Only Coverage: $4,400 in 2026

If you have self-only HSA-eligible coverage, your HSA max contribution for 2026 is $4,400. This higher limit reflects the expectation that health care costs will continue to rise. You can use this number to make more accurate projections when you review your medical budget for the year.

How you can use the 2026 self-only limit

Adjust payroll deductions early in the year to spread contributions evenly
Increase your contribution rate if you expect new prescriptions or diagnostic tests
Use the limit to create tax planning scenarios during open enrollment
Coordinate your HSA strategy with your 401(k) or IRA contributions if you’re planning around tax brackets

If you had gaps in your HSA contributions in previous years, the 2026 limit helps you catch up on building a stronger medical reserve.

Family Coverage: $8,750 in 2026

If your HSA-eligible plan covers your household, the 2026 HSA contribution limit rises to $8,750. This is the total your family can contribute to all HSAs combined. You may find the larger limit helpful if you have children with regular medical needs, dental care expenses, or orthodontic evaluations planned.

How families apply the 2026 limit

You and your spouse can divide contributions based on your income sources
You can use early-year contributions to prepare for scheduled procedures
You can reduce payroll deposits mid-year if employer contributions arrive later
You can use the limit when estimating medical spending for children with ongoing care needs

If one spouse has access to better payroll deductions or higher income, you can route more of the family’s HSA contributions through that person’s paychecks.

Catch-Up Contribution: Still $1,000 for Age 55 and Older

The catch-up contribution remains at $1,000 for 2026. This amount does not change with inflation. Once you turn 55, you qualify for the full catch-up for the year, even if your birthday is late in the year.

What you need to know

You must deposit the catch-up into your own HSA
If your spouse is also 55 or older, they need a separate HSA to use their own catch-up
The catch-up can support future Medicare premiums, dental work, and long-term care expenses
You can boost your HSA balance quickly by combining the catch-up with the higher 2026 limits

Many individuals near retirement use the catch-up to prepare for health expenses that arrive during the Medicare transition.

Employer Contributions Count Toward Your 2026 Limits

Your employer’s funding continues to be part of your total allowable HSA contribution for 2026. This includes every form of employer-funded HSA support.

Employer contributions include

Company-funded deposits at the start of the year
Monthly employer contributions tied to your health plan design
Wellness rewards that go directly to your HSA
Matching programs based on your payroll deductions

Why employer contributions matter for you

They reduce the amount you can contribute personally
They help you reach the 2026 HSA contribution limit faster
They require coordination to avoid overfunding
They influence mid-year adjustments to your payroll deductions

How to protect yourself from contribution mistakes

Since the 2026 limits are higher, it’s easy to accidentally overfund if employer deposits change unexpectedly. You can protect yourself by:

Reviewing employer contributions at the start of the year
Checking your HSA balance quarterly
Confirming payroll deductions after open enrollment
Keeping track of bonuses or late-year income spikes that may shift your strategy

These steps help you stay within the HSA contribution limits for 2026 and avoid excise penalties.

Who Is Eligible to Contribute to an HSA?

Understanding HSA eligibility is essential because your ability to use the HSA contribution limits for 2025 and 2026 depends entirely on meeting the IRS rules. Even one coverage change can impact your contribution timeline, your prorated amount, and whether you qualify for the last-month rule. You need to meet all eligibility criteria for every month you contribute.

1. You must be enrolled in an HSA-eligible High Deductible Health Plan (HDHP)

Your health plan must meet the IRS definition of an HSA-eligible HDHP. This means:

Your deductible meets the IRS minimum
Your plan does not provide coverage before the deductible is met for services other than preventive care
Your out-of-pocket maximum stays within the IRS limits
Your plan is labeled as HSA-eligible in your employer benefits guide or insurance documents

If you’re reviewing plan options during open enrollment, look for “HSA-eligible” or “qualifies for HSA contributions” on the plan description. A traditional PPO or low-deductible plan will not qualify.

Why this matters

Your eligibility determines whether you can use the HSA contribution limits for 2025 and 2026
If you switch out of an HSA-eligible plan mid-year, your contribution limit changes immediately
Employer contributions can only be deposited into an HSA if your plan meets HSA rules

2. You cannot be enrolled in Medicare

Once you enroll in Medicare Part A or Part B, you lose the ability to contribute to an HSA. This includes automatic retroactive enrollment that may reach up to six months before your application date.

What you need to watch

If you delay Social Security benefits, you can also delay Medicare and keep contributing to your HSA
Medicare enrollment affects both employer HSA contributions and your own deposits
You can still spend the HSA funds you already accumulated, even though you can no longer contribute

Many individuals keep working past age 65 and postpone Medicare specifically to continue funding their HSA.

3. You cannot be covered by a non-HDHP health plan

Even if you are enrolled in an HSA-eligible HDHP, you lose eligibility if you’re also covered by another health plan that does not meet HDHP rules. This includes:

A spouse’s traditional PPO
A general purpose FSA
A spouse’s FSA that covers the whole household
Secondary coverage that pays before the HDHP deductible
Certain employer-funded medical benefits that begin before the deductible

What is allowed

You can have an HSA alongside a limited purpose FSA or a dependent care FSA. This distinction matters if you want to save for dental or vision expenses while still contributing to your HSA.

Why this rule affects many households

If your spouse changes their health plan or switches to a non-HDHP mid-year, it can impact your eligibility even if your own plan stays the same.

4. You cannot be claimed as someone else’s tax dependent

If someone else can claim you as a tax dependent, you cannot contribute to an HSA. This rule commonly applies to:

College students
Adult children on a parent’s health plan
Individuals receiving financial support that qualifies them as dependents

Why the IRS requires this

HSA eligibility is tied to tax status, not just health insurance enrollment. The IRS only allows the person responsible for the health plan and medical expenses to make contributions.

Putting the rules together

You qualify to contribute to an HSA only when:

You’re enrolled in an HSA-eligible HDHP
You’re not enrolled in Medicare
You’re not covered by a non-HDHP health plan
You’re not someone else’s tax dependent

These four rules determine whether you can use the HSA contribution limits for 2025 and 2026 without issue.

HDHP Requirements for 2025 and 2026

To use the HSA contribution limits for 2025 and 2026, your health plan must meet the IRS definition of an HSA-eligible High Deductible Health Plan. These HDHP rules determine whether you can make HSA contributions at all, even if your employer offers payroll deductions or shows an HSA option during open enrollment. The deductible and out-of-pocket caps change each year, so you need to confirm that your plan meets the correct thresholds.

2025 HDHP Requirements

Coverage Type	Minimum Deductible	Out-of-Pocket Cap
Self-Only	$1,650	$8,300
Family	$3,300	$16,600

For 2025, your health plan must meet the following standards to qualify for HSA contributions:

Self-Only Coverage

Minimum deductible: $1,650
Out-of-pocket cap: $8,300

If you select self-only HDHP coverage for 2025, these two numbers define the minimum deductible you must pay before the plan covers non-preventive services and the highest amount you might pay in the year for covered costs.

Family Coverage

Minimum deductible: $3,300
Out-of-pocket cap: $16,600

The family thresholds apply when your plan covers you and one or more dependents. Family plans tend to reach the deductible earlier due to multiple users on the same coverage, so knowing the exact out-of-pocket cap helps you estimate your risk exposure.

Why the 2025 HDHP thresholds matter for you

If your deductible or out-of-pocket cap is lower than these amounts, your plan does not qualify as an HDHP
You cannot contribute to an HSA unless both thresholds are met
Your ability to use the 2025 HSA contribution limit of $4,300 or $8,550 depends on meeting this requirement
You can use these figures during open enrollment to verify that your plan is truly HSA-eligible

2026 HDHP Requirements

The IRS increased the HDHP thresholds again for 2026. These new limits determine whether you can use the higher HSA contribution limits for 2026.

Coverage Type	Minimum Deductible	Out-of-Pocket Cap
Self-Only	$1,700	$8,500
Family	$3,400	$17,000

Self-Only Coverage

Minimum deductible: $1,700
Out-of-pocket cap: $8,500

This small increase reflects expected growth in medical costs. If you’re reviewing plans for 2026, confirm that the deductible and out-of-pocket amounts align with these figures before planning your 2026 HSA deposits.

Family Coverage

Minimum deductible: $3,400
Out-of-pocket cap: $17,000

Family plans must meet both criteria. If your out-of-pocket cap is below the required threshold, the plan is not HSA-eligible, even if the deductible seems correct.

How these 2026 limits affect your planning

You can only use the 2026 HSA contribution limit of $4,400 or $8,750 if your plan meets these HDHP standards
If your employer changes carriers or plan designs for 2026, your eligibility may shift
You need to confirm HDHP eligibility during open enrollment because plan designs sometimes adjust deductibles or out-of-pocket amounts without clear notice

How to confirm if your plan qualifies

You can check HDHP eligibility by reviewing:

Your benefits summary during open enrollment
The “Plan Details” section on your insurance carrier’s portal
Your employer’s benefit guide
The deductible and out-of-pocket sections on your Summary of Benefits and Coverage

Search specifically for terms like:

“HSA-eligible”
“Qualifies for HSA contributions”
“High Deductible Health Plan”

These labels help you confirm whether you can use the HSA contribution limits for 2025 and 2026 without running into IRS issues.

State-Level Considerations

HSA tax rules are federal, but states decide how they treat contributions, earnings, and withdrawals. Your state of residency determines whether your HSA gives you only federal tax advantages or both federal and state benefits. If you split time between states, move during the year, or maintain part-year residency, each state’s rules can affect your HSA reporting.

States That Follow Federal HSA Rules

Most states align with federal HSA tax treatment. This means:

Your HSA contributions are not taxed at the state level
HSA earnings remain tax advantaged
Withdrawals for qualified medical expenses are not taxed
You do not need to make state-level adjustments on your return

Southeastern states that follow federal rules

If you file taxes in these Southeastern states, your HSA tax treatment mirrors federal rules:

Florida
Georgia
Alabama
Mississippi
South Carolina
North Carolina
Tennessee

What this means for you

If you live in one of these states:

Your federal and state HSA reporting stays consistent
Your HSA contribution limits for 2025 and 2026 produce the same tax results on both returns
You can maximize contributions without worrying about state-level adjustments
HSA withdrawals for qualified medical expenses retain their tax advantages on both levels

Florida’s Treatment of HSAs

Florida is one of the simplest states for HSA planning because it does not have a state income tax. If you live in Florida, your HSA benefits are purely federal.

What this means for you in Florida

Your HSA contributions reduce your federal taxable income
Florida does not tax income, so your HSA contributions do not change your state tax liability
Withdrawals for qualified medical expenses are not taxed at the state level
There are no Florida-specific HSA restrictions, reporting requirements, or limitations
Your HSA remains tax efficient even after moving to Florida from a state that taxes HSA earnings

This is helpful if you’re preparing for retirement in Florida because HSA funds can support Medicare premiums, prescriptions, and long-term health costs without affecting state taxes.

States That Do Not Follow Federal HSA Rules

Two states treat HSAs differently:

California
New Jersey

These states do not recognize HSAs as tax-advantaged accounts at the state level.

How California and New Jersey handle HSAs

Your contributions may be taxed at the state level
Earnings inside the HSA may be taxed each year
You may need to track interest and investment returns separately for state reporting
Withdrawals for qualified medical expenses may still be taxed at the state level

Why this matters

If you live, work, or maintain residency in California or New Jersey:

Your HSA gives you federal tax advantages but not state-level tax relief
You may need to adjust your state return to include HSA earnings
Your long-term medical planning may look different than someone living in a state that follows federal rules
Moving into or out of these states during the year can change how your HSA is taxed

Examples of situations affected by state rules

You move from California to Florida mid-year
You work in New Jersey but maintain residency in Pennsylvania
Your spouse moves before you, creating split-year residency
You sell a home in a federal-aligned state and relocate to California for part of the year

In these cases, the state where you file your return determines the tax outcome for your HSA.

How to Calculate Your Actual HSA Contribution Limit

Your actual contribution limit may differ from the IRS limit because of:

Employer contributions
Changes in coverage
Number of eligible months
Your age
Changes in Medicare enrollment
Spousal situation

Below are the key methods.

A. Standard Calculation: IRS Limit Minus Employer Contribution

Formula: IRS limit − employer contribution = amount you may add.

Example:

Family limit (2025): $8,550
Employer contribution: $2,000
Your contribution: $6,550

B. Partial-Year Eligibility (Prorated Limit)

If you were eligible for only part of the year, your contribution limit is based on the number of months you were eligible.

Formula

Annual HSA limit × (Eligible months ÷ 12)

That gives you your prorated limit before subtracting employer contributions.

Example

You had self-only coverage for 7 months in 2025.

Start with the annual limit: $4,300
Multiply by the number of eligible months: $4,300 × 7 = $30,100
Divide by 12: $30,100 ÷ 12 = $2,508.33

This gives you a prorated amount of $2,508.33.

If your employer contributed $300, subtract that amount:

$2,508.33 − $300 = $2,208.33

Your personal contribution limit would be $2,208.33.

C. HSA Contribution Limits When You Are Enrolled on December 1 (Last-Month Rule)

If you are enrolled in an HSA-eligible health plan on December 1, you may contribute the full annual amount for that year, even if you were not eligible for all 12 months. This is called the last-month rule.

For example, whether you enrolled 1 day before December or 6 months before, the IRS allows you to contribute as if you were eligible for the entire year.

The last-month rule comes with an important condition. You must stay enrolled in an HSA-eligible health plan for a full testing period that runs from December 1 of that year through December 31 of the following year.

If you lose HSA-eligible coverage at any point during that testing period, the extra amount you contributed becomes taxable income. You must also pay an additional penalty on that excess amount when filing your tax return.

This rule is easy to misunderstand, so it is important to be sure you will keep HSA-eligible coverage during the entire testing period before relying on it.

D. Switching From Self-Only to Family Coverage During the Year

If your coverage type changes mid-year, calculate each part of the year separately and combine the results.

Formula:

Self-only annual limit × (self-only months ÷ 12) + Family annual limit × (family months ÷ 12)

Example: Coverage Change in 2025

Jan–Jun: Self-only coverage (6 months)

Jul–Dec: Family coverage (6 months)

Step 1: Calculate the Self-Only Portion

Annual self-only limit: $4,300
$4,300 × 6 = $25,800
$25,800 ÷ 12 = $2,150

Self-only portion: $2,150

Step 2: Calculate the Family Portion

Annual family limit: $8,550
$8,550 × 6 = $51,300
$51,300 ÷ 12 = $4,275

Family portion: $4,275

Step 3: Add Both Portions

$2,150 + $4,275 = $6,425

Step 4: Subtract Employer Contributions

Final contribution limit = $6,425 − employer contributions

D. The Last-Month Rule

If you are HSA-eligible on December 1, the IRS allows you to contribute as if you were eligible for the entire year.

However, you must stay eligible through December 31 of the following year, known as the testing period.

Example: Testing Period Failure

You gain HDHP coverage on December 1, 2025.
You contribute the full 2025 limit using the last-month rule.
You lose HDHP coverage in March 2026.

Result:

The extra amount becomes taxable income and is subject to an additional penalty.

This is a common area of confusion for taxpayers.

HSA Contribution Limits When You Aren’t Enrolled for the Full Year

If you aren’t enrolled in an HSA-eligible health plan for the entire year, your contribution limit is prorated. The IRS bases this on the number of months you were eligible on the first day of each month.

If you are covered on December 1, you may qualify to contribute the full annual amount under the last-month rule, which is explained in the next section.

To calculate a prorated limit, count the number of eligible months, divide that number by 12, and multiply it by the contribution limit you would have received if you were eligible all year.

Example Using 2025 Limits

Self-only annual limit for 2025: $4,300
Your coverage ends on November 30, 2025.
This means you were eligible for 11 months (January through November).

Step 1: Multiply the annual limit by the number of eligible months

$4,300 × 11 = $47,300

Step 2: Divide by 12

$47,300 ÷ 12 = $3,941.67

Your prorated HSA contribution limit for 2025 is $3,941.67.

If your employer contributed anything during the year, subtract that amount from $3,941.67 to find the portion you can contribute.

Spousal Rules and Catch-Up Contributions

A. Both Spouses Age 55 or Older

Each spouse may contribute a $1,000 catch-up, but these amounts must be placed in separate HSAs.

B. One Spouse on Medicare

Once enrolled in Medicare, that spouse cannot contribute.
However, the non-Medicare spouse may still contribute to a family HSA.

C. Different Coverage Types Within a Household

If one spouse has self-only HDHP coverage and the other has family HDHP coverage, IRS rules consider the household as having family coverage. The combined household contribution is capped at the family limit.

D. Employer Contributions

Employer deposits into one spouse’s HSA reduce the household’s total allowable contribution.

Handling an HSA Overcontribution

If you contribute more than the IRS permits, you must correct the excess to avoid a penalty.

How to Fix It

Contact your HSA custodian.
Request a “return of excess contribution.”
Withdraw the excess and earnings on that excess.
Report it properly on your tax return.

Example

You add $500 more than allowed in 2025.If corrected before the tax filing deadline, the amount can be removed without penalty. If not corrected, the IRS may apply a yearly penalty on that excess until it is resolved.

Non-Qualified Withdrawals

Before Age 65

A withdrawal used for non-qualified expenses is subject to federal income tax and an additional penalty.

After Age 65

Non-qualified withdrawals are subject to income tax but no additional penalty.

Qualified expenses remain tax-free.

Common qualified expenses in retirement include:

Medicare Part B and Part D premiums
Medicare Advantage premiums
Prescription drugs
Vision and dental care
Certain long-term care services
Long-term care insurance premiums up to IRS limits

HSA vs FSA vs Limited Purpose FSA

Many individuals mix these terms. Here is a simple comparison:

Feature	HSA	FSA	Limited Purpose FSA
Ownership	Individual	Employer	Individual
Funds Roll Over	Yes	Usually no	Yes
Investment Option	Yes	No	No
Eligible With HDHP	Required	Not required	Yes
Use With HSA	—	No	Yes (dental/vision only)

A limited purpose FSA can help cover dental and vision costs while preserving the ability to contribute to an HSA.

HSAs in Retirement Planning

Medical costs often rise as individuals age. HSAs help address these expenses with tax advantages that extend into retirement.

HSA funds can be used for:

Medicare Part B and Part D premiums
Medicare Advantage premiums
Long-term care insurance premiums (subject to IRS limits)
Out-of-pocket medical, dental, and vision expenses
Prescription medications

For retirees who want to manage taxable income, HSAs offer flexibility because qualified expenses can be paid without creating additional tax burden.

How We See HSAs Fit Into Real Retirement Planning

When we work with individuals who are preparing for retirement, the HSA becomes one of the more practical tools for managing long-term medical costs. You’re not just contributing to an account. You’re setting up a separate pool of funds that can support you when expenses start to rise, especially later in life.

We see this play out across different client profiles. Some want to reduce pressure on their IRA withdrawals. Others want flexibility during the Medicare years. Others simply want a way to handle recurring out-of-pocket expenses without touching their taxable brokerage account.

We see HSAs make a difference in several ways:

They help lower federal taxable income when you contribute during your working years.
They grow without federal tax when you invest the balance.
They give you flexibility to pay for medical bills in retirement without tapping taxable brokerage accounts or traditional IRAs.
They help reduce the drawdown pressure on portfolios during years when markets are down and you still need to cover prescriptions, dental work, hearing aids, or specialist visits.

From a planning standpoint, you want sources of cash that do not trigger taxes when used for qualified medical expenses. An HSA can fill that role if you fund it consistently and give it time to grow. You’re essentially building a health-focused reserve that sits outside your taxable, tax-deferred, and Roth strategies.

We also see HSAs used effectively by retirees who are preparing for Medicare expenses:

Part B premiums
Part D premiums
Medicare Advantage premiums
Some long-term care insurance premiums

These ongoing costs can be predictable, which makes the HSA a useful tool for smoothing cash flow later in life.

When an HSA is coordinated with your other accounts, it reduces stress on your broader retirement plan. It also helps you avoid unnecessary withdrawals from IRAs and 401(k)s, especially in years when markets are volatile and you’d prefer not to sell assets.

If you’re still several years away from retirement, you can treat the HSA almost like a long-horizon investment account. You pay smaller medical bills out of pocket, let the HSA grow, then use it later for larger expenses when income may be fixed.

This gives you a level of control that many households appreciate as they step into retirement. You know you have a dedicated pool for future health costs, and that can influence better decision-making across the rest of your accounts.

Frequently Asked Questions

What are the HSA limits for 2025?

$4,300 for self-only coverage and $8,550 for family coverage.

What are the HSA limits for 2026?

$4,400 for self-only coverage and $8,750 for family coverage.

Can both spouses add the catch-up amount?

Yes. Each spouse who is age 55 or older can contribute a separate $1,000 catch-up. Each spouse must have their own HSA to use the catch-up rule. You cannot combine both catch-ups into one HSA.

When is the contribution deadline?

You can contribute up to the federal tax filing deadline for that calendar year. For example, contributions for 2025 can be made up to the 2026 tax filing deadline.

Can I contribute after enrolling in Medicare?

No. You can still spend your existing HSA balance for qualified medical expenses, but you cannot make new deposits once Medicare enrollment begins. This includes automatic retroactive Medicare enrollment tied to Social Security benefits.

Are HSAs taxed in Florida?

Florida does not have a state income tax. Your HSA contributions lower your federal taxable income, and qualified withdrawals are not taxed at the state level.

What if my employer contributes too much?

You need to correct the excess by requesting a “return of excess contributions” from your HSA custodian. This avoids the 6 percent excise penalty that applies to uncorrected excess amounts.

What counts as a qualified medical expense?

Qualified medical expenses include:

Doctor visits
Specialist care
Prescription medications
Medical devices
Dental treatment
Vision exams and glasses
Hearing aids
Some long-term care services

These expenses must meet IRS guidelines under Section 213(d).

Can I use my HSA to pay Medicare premiums?

Yes. Once you’re enrolled in Medicare, you can use your HSA to pay:

Medicare Part B premiums
Medicare Part D premiums
Medicare Advantage premiums
Certain long-term care insurance premiums

You cannot use your HSA to pay Medigap premiums.

Can I keep my HSA if I move to another state?

Yes. Your HSA stays with you regardless of where you move. If you move to a state that taxes HSAs, such as California or New Jersey, the tax treatment of contributions and earnings may change.

Can I keep contributing if my spouse enrolls in Medicare but I do not?

Yes. If you remain in an HSA-eligible HDHP and you are not enrolled in Medicare, you can continue contributing even if your spouse enrolls in Medicare.

What happens if I switch from a family plan to a self-only plan mid-year?

Your contribution limit changes. You calculate your prorated limit by applying the self-only limit to the months you had self-only coverage and the family limit to the months you had family coverage.

Can I open an HSA if I’m self-employed?

Yes. If you’re self-employed and enrolled in an HSA-eligible HDHP, you can contribute up to the annual limits for your coverage type. Your business does not need a group health plan.

Do I need earned income to contribute to an HSA?

No. HSA eligibility is based on your health coverage, not your income source. You can contribute even if income comes from investments, rental property, pensions, or Social Security.

Can I invest my HSA funds?

Yes. Most HSA custodians allow you to invest once your balance reaches a minimum threshold. Investment growth is tax advantaged if used for qualified medical expenses.

Do I lose my HSA if I change employers?

No. Your HSA stays with you. You can continue using the funds even if you no longer have an HSA-eligible plan or retire.

Can I reimburse myself later for old medical bills?

Yes. As long as the medical expense occurred after your HSA was established and you kept documentation, you can reimburse yourself years later.

Closing Thoughts

HSA rules change each year, and these adjustments affect individuals, families, and retirees in different ways. Understanding how much you can contribute—and how these accounts work with your health coverage and retirement strategy—helps you prepare for both current and future medical costs with confidence.

If you want to discuss how an HSA fits into your broader retirement plan, the team at Landsberg Bennett is here to help.