The Tax Day HSA Contributions Deadline
The HSA contributions deadline for 2023 has passed, but you still have time to contribute and potentially reduce your tax liability if you have an extended tax deadline.
The HSA contributions deadline was April 15, so if you haven't already maxed out your 2023 contributions, you only have time to do so if you have an extended tax deadline.
HSAs (Health Savings Accounts) offer a tax-efficient way to pay for medical expenses. Since employer contributions aren't included in your taxable income, earnings are tax-free, and distributions are not taxed if you use them to pay qualified medical expenses. You might also qualify for a deduction (or a larger deduction) on your tax return.
HSA contributions deadline
Each year, you have until the tax filing deadline to make HSA contributions for the previous calendar year. So, while you have a little more time to take action, the HSA contributions clock is still ticking.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
(Note: The HSA contributions deadline is later for eligible taxpayers in some states with automatic IRS tax deadline extensions due to severe storms and natural disasters.)
HSA contribution limits 2023
- For the 2023 tax year, you can contribute up to $3,850 to an HSA if you have self-only coverage
- If you have family coverage, the max HSA contribution for 2023 is $7,750
- Anyone who was age 55 or older at the end of 2023 can put in an additional $1,000 in "catch up" contributions for the year
However, the contribution limits can be reduced If your employer makes contributions to your HSA that are excludable from your income — including amounts contributed through a cafeteria plan. Those contributions count against your overall contribution limit.
Excess HSA Contributions
If you haven't reached your limit, you might want to think about making an HSA contribution today. But don't go over your HSA limit! There's a 6% penalty on excess HSA contributions. And this penalty applies to each year the excess contribution remains in your account.
What if you contribute too much to your HSA? If you accidentally put too much money in your HSA for 2023, you can withdraw the excess amount and avoid the penalty if you do both of the following:
- Withdraw the excess before the end of the day on Tax Day (April 15).
- Withdraw any income earned on the withdrawn contributions and include the earnings in "Other income" on your 2023 tax return.
If you don't withdraw all your excess contributions, you can apply them toward your 2024 HSA contribution limits. Excess contributions from previous years that are still in your HSA account can be deducted, but the deduction is limited to the lesser of (1) your maximum HSA contribution limit for the year minus any amounts actually contributed for the year, or (2) the total excess contributions in your HSA at the beginning of the year.
How does the HSA deduction work?
As mentioned above, you may be able to deduct your HSA contributions for the 2023 tax year on your current federal income tax return (up to the maximum contribution limit). And you don't have to itemize to claim this tax break. Instead, your contributions are reported as an adjustment to income on Line 13 of Schedule 1 (Form 1040). You also need to submit Form 8889 with your tax return.
So, it might be wise to put more money into your HSA before the 2023 HSA contributions deadline if you haven't already reached the limit. That's especially true if you plan to contribute to the account soon anyway. That way, you'll get that extra deduction for 2023 and save more cap space for 2024 contributions.
There are some limitations, though.
- You can't deduct HSA contributions made by your employer, including pre-tax funds contributed through payroll deductions.
- You also can't claim the deduction if someone else can claim you as a dependent on their tax return.
- Distributions from an IRA that are contributed to your HSA in a direct trustee-to-trustee transfer are not deductible, either.
If you already filed your 2023 tax return, you can file an amended tax return to claim a new or increased HSA deduction if you add more to your account before the deadline. You generally have three years from the date you filed your original return or two years from the date you paid any tax due to file an amended return (whichever date is later). Once the IRS receives your amended return, you can track its status online using the IRS's "Where's My Amended Return?" tool.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.
- Katelyn WashingtonFormer Tax Writer
-
Setting Objective Criteria for Employee Bonuses Aligned With Company Goals
When employees win, the company wins.
By Stephen Nalley Published
-
A Modern Guide to Money Etiquette: Gifts, Tips, Splitting Bills and More
What is modern money etiquette? The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
By Emma Patch Published
-
Three Creative Ways to Lower Your Retirement Taxes
Tax Tips You can apply key minimalism concepts for potential tax savings. Here’s how.
By Kate Schubel Published
-
States That Offer a Child Tax Credit in 2024
Child Tax Credit Fifteen states plus the District of Columbia currently offer a child tax credit. Here’s how much you can get.
By Gabriella Cruz-Martínez Last updated
-
Three Tax Reasons to Retire in Panama
Retirement Taxes With low property taxes and tax-free foreign income, this tropical paradise could make you rethink retirement as a U.S. expat.
By Kate Schubel Last updated
-
Is the IRS Coming for Your Gambling Winnings?
Tax Tips The latest tax audit on unreported income points to high-income, high-wealth gamblers. Could
By Kate Schubel Published
-
Best States to Buy Chocolate Candy Tax-Free
State Taxes There’s something spooky this Halloween and it’s not just the ghouls. Find out if your state’s sales tax takes a bite out of sweet savings.
By Kate Schubel Last updated
-
Five Ways Your Boss Can Step Up in the Aftermath of a Hurricane
Tax Relief The IRS offers some tax advantages for employers that financially help their employees during federally declared disasters.
By Gabriella Cruz-Martínez Published
-
Six Tax Deadlines for October 15
Tax Deadlines You might know about the federal tax return extension deadline, but did you know about these other tax deadlines for Oct. 15?
By Kate Schubel Last updated
-
IRS Sued for Millions Over Employee Retention Credit (ERC) Delays
Tax Credits The pandemic-era tax refunds for businesses have been a contention point for the agency, now employers are fighting for their cash.
By Gabriella Cruz-Martínez Last updated