2026 HSA Contribution Limits Are Set: What to Know Now
The IRS says Health Savings Account contribution limits will increase again next year due to inflation.
If you have a Health Savings Account (HSA) or are thinking about one, the IRS has announced the new contribution limits for 2026. These annual inflation adjustments are designed to keep pace with rising costs.
However, it's worth noting that HSAs might not be right for everyone.
So, as you plan your finances for next year, it’s good to know the new limits and the pros and cons of an HSA. Let's dive in.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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.
2026 HSA and HDHP limits: What’s new?
For 2026, the IRS has set the following annual HSA contribution limits:
- Individual (self-only) coverage: $4,400 (up from $4,300 in 2025)
- Family coverage: $8,750 (up from $8,550 in 2025)
- Catch-up for age 55+: $1,000 (unchanged)
Category | 2025 Limit | 2026 Limit |
|---|---|---|
Self Only HSA | $4,300 | $4,400 |
Family HSA | $8,550 | $8,750 |
Catch-up 55 + | $1,000 | $1,000 |
Remember: To qualify for an HSA, you must be enrolled in a high-deductible health plan (HDHP).
The IRS also adjusted the minimum deductible and maximum out-of-pocket amounts for HDHPs for 2026:
- Minimum deductible: $1,700 for individuals, $3,400 for families
- Maximum out-of-pocket: $8,500 for individuals, $17,000 for families
Key benefits of an HSA
HSA limits are adjusted annually for inflation.
HSAs are popular for their triple tax benefits. Basically, contributions are made pre-tax, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free.
Unlike flexible spending accounts (FSAs), HSA balances roll over from year to year and can be invested, allowing funds to grow for future needs. You own your HSA and keep it and the funds in it when you leave your job.
After age 65, you can use HSA funds for non-medical expenses without penalty (though you’ll pay regular income tax on those withdrawals).
Is there a downside to an HSA?
However, HSAs are not without their downsides. The most significant is the requirement to enroll in a high-deductible health plan. While those plans often have lower monthly premiums, they come with higher upfront costs if you need care.
For instance, next year (2026), you’ll need to pay at least $1,700 out of pocket before your insurance starts to pay for most services, or $3,400 for a family. (In many cases, the deductible limits are much higher than those minimums.)
Those out-of-pocket costs can be a significant financial strain for people with ongoing health needs or limited savings. Some people might even delay necessary care due to concern about upfront costs.
There are also strict rules about how HSA funds can be used.
- If you spend HSA money on anything other than qualified medical expenses before age 65, you’ll face income tax and a 20% penalty on the amount withdrawn.
- That's a steeper penalty than what applies to early withdrawals from many retirement accounts.
- Over-contributing to your HSA can also result in tax penalties.
Managing an HSA requires record-keeping. You should keep receipts and documentation to show that withdrawals were for eligible expenses. You could owe taxes and penalties if the IRS audits you and cannot provide proof.
Eligibility is another limitation. You can’t contribute to an HSA if you’re enrolled in Medicare or are claimed as someone else’s dependent. You also can’t have a general-purpose FSA at the same time as an HSA.
Finally, the full benefits of an HSA are only realized by those who can afford to contribute and invest consistently. Setting aside enough to take advantage of long-term tax savings may be challenging for people living paycheck to paycheck.
HSA tax planning for 2026: Bottom line
As you review your options for the coming year, weigh the practical considerations involved with HSAs.
The new limits for 2026 offer more opportunity to save, but only if the structure of an HDHP and HSA rules fit your health and financial situation.
Consult a trusted and qualified financial planner or tax professional if you're unsure.
Read More
-
What to Do If You Plan to Make Catch-Up Contributions in 2026Under new rules, you may lose an up-front deduction but gain tax-free income once you retire.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
How to Max Out Your 401(k) in 2026 (New Limits are Higher)In 2026, the maximum contribution limits for 401(k) plans have increased, giving you an excellent shot at maximizing your retirement savings.
-
3 Major Changes to the Charitable Deduction for 2026Tax Breaks About 144 million Americans might qualify for the 2026 universal charity deduction, while high earners face new IRS limits. Here's what to know.
-
Retirees in These 7 States Could Pay Less Property Taxes Next YearState Taxes Retirement property tax bills could be up to 65% cheaper for some older adults in 2026. Do you qualify?
-
Estate Tax Quiz: Can You Pass the Test on the 40% Federal Rate?Quiz How well do you know the new 2026 IRS rules for wealth transfer and the specific tax brackets that affect your heirs? Let's find out!
-
The November CPI Report Is Out. Here's What It Means for Rising PricesThe November CPI report came in lighter than expected, but the delayed data give an incomplete picture of inflation, say economists.
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
New IRS Changes to FSA Contribution Limits for 2026: What to KnowHealth Care Flexible Spending Accounts have tax advantages worth looking into, especially in light of new IRS changes.
