2016 HSA Contribution Limit
For 2016, the HSA Contribution Limit is $3,350 (Self-only), $6,750 (Family), $1,300 (HDHP minimum deductible, self-only) and 3 more figures below.
| Item | Self-only | Family |
|---|---|---|
| HDHP minimum deductible | $1,300 | $2,600 |
| HDHP out-of-pocket maximum | $6,550 | $13,100 |
Effective 2016-01-01Source: Rev. Proc. 2015-30 (IRS)Verified 2026-09-01
Who it applies to
Individuals and families with high deductible health plans contributing to Health Savings Accounts in 2016.
What changed this year, and why
The annual Health Savings Account contribution limits and High Deductible Health Plan requirements for the 2016 calendar year.
Who can contribute, and what counts as an HDHP
To contribute to a Health Savings Account, you must be an eligible individual. That means you are covered by a high deductible health plan (HDHP) on the first day of the month, you have no other disqualifying health coverage, you are not enrolled in Medicare, and you cannot be claimed as a dependent on another taxpayer's return. An HDHP is a plan with a higher annual deductible than typical health plans and a cap on the total annual deductible plus out-of-pocket expenses (copayments and similar amounts, but not premiums). For 2016, an HDHP must have a minimum annual deductible of at least $1,300 for self-only coverage or $2,600 for family coverage. It must also cap total out-of-pocket costs at no more than $6,550 for self-only coverage or $13,100 for family coverage. An HDHP may still provide preventive care benefits without a deductible or with one below the minimum. Each eligible spouse must open a separate HSA; joint accounts are not permitted.
To be an eligible individual and qualify for an HSA, you must meet the following requirements. You are covered under a high deductible health plan (HDHP), described later, on the first day of the month. You have no other health coverage except what is permitted under Other health coverage, later. You aren’t enrolled in Medicare. You can’t be claimed as a dependent on someone else's 2016 tax return.
Publication 969 (2016), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
The age 55 catch-up contribution
If you are an eligible individual who is age 55 or older at the end of your tax year (and not yet enrolled in Medicare), your HSA contribution limit is increased by an additional amount beyond the regular self-only or family limit. For 2016, this catch-up addition allows an individual age 55 or older with self-only HDHP coverage to contribute up to $4,350, which is the regular self-only limit of $3,350 plus the additional contribution of $1,000. The catch-up contribution is not available for any month in which you are enrolled in Medicare, so if you enroll in Medicare during the year, your catch-up amount is prorated accordingly. The additional contribution is made to the same HSA as your regular contributions and counts toward the same annual maximum.
Additional contribution. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. For example, if you have self-only coverage, you can contribute up to $4,350 (the contribution limit for self-only coverage ($3,350) plus the additional contribution of $1,000). How- ever, see Enrolled in Medicare, later.
Publication 969 (2016), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
Excess contributions and the 6% excise tax
If the total contributions to your HSA for the year exceed the applicable limit, the excess is not deductible and any employer-made excess contributions are included in your gross income. You must also generally pay a 6% excise tax on the excess each year it remains in the account. The excise tax is calculated on Form 5329 and reported with your federal return. You can avoid the excise tax for a year by withdrawing the excess (and any income earned on it) before the due date of your tax return, including extensions; the withdrawn excess is then included in income for the year it was contributed, but the 6% tax does not apply. If you leave the excess in the account, the 6% tax applies again the next year, so it is important to correct excess contributions as soon as possible.
Excess contributions. You will have excess contribu- tions if the contributions to your HSA for the year are greater than the limits discussed earlier. Excess contribu- tions aren’t deductible. Excess contributions made by your employer are included in your gross income. If the excess contribution isn’t included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Generally, you must pay a 6% excise tax on excess contributions.
Publication 969 (2016), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
The last-month rule and its testing period
Under the federal last-month rule for Health Savings Accounts in 2016, if you are an eligible individual on December 1 (the first day of the last month of a calendar tax year), you are treated as having been eligible for the entire year and as having had the same HDHP coverage — self-only or family — all year. That lets a taxpayer who picked up HSA-eligible coverage partway through the year still contribute up to the full 2016 annual limit: $3,350 for self-only coverage or $6,750 for family coverage, rather than a prorated amount. The testing period for that full-year treatment runs from the last month of the tax year through the last day of the 12th month after it — for 2016, December 1, 2016 through December 31, 2017. During that window you must stay an eligible individual with HDHP coverage. Exceptions are made only for death or disability. If you lose eligibility for any other reason before the testing period ends, the extra contributions you were able to make under the last-month rule must be included in income in the year you failed, and they are subject to an additional 10% tax.
Last-month rule. Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are consid- ered an eligible individual for the entire year. You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. Testing period. If contributions were made to your HSA based on you being an eligible individual for the en- tire year under the last-month rule, you must remain an eli- gible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month (for example, December 1, 2016, through December 31, 2017). If you fail to remain an eligible individual during the test- ing period, for reasons other than death or becoming disa- bled, you will have to include in income the total contribu- tions made to your HSA that wouldn’t have been made except for the last-month rule. You include this amount in your income in the year in which you fail to be an eligible individual. This amount is also subject to a 10% additional tax.
Publication 969 (2016), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
The 20% tax on non-qualified distributions
When you take money out of a Health Savings Account for anything other than qualified medical expenses, the IRS treats that distribution as taxable income and applies an additional 20% tax on top of ordinary income tax. You calculate this penalty on Form 8889 and attach it to your federal income tax return (Form 1040 or Form 1040NR). The surcharge applies only to the portion of the distribution that is not used for eligible medical care, not to the entire withdrawal if only part of it was non-qualified. There are three situations where the additional penalty does not apply: the distribution is made after the date you become disabled, after you reach age 65, or after your death. In those cases the distribution is still included in income if it is not used for qualified medical expenses, but the extra surcharge is waived. Because the penalty only disappears after age 65 (or disability or death), HSA funds used for non-medical purposes before that point face both ordinary income tax and the excise tax, making non-qualified withdrawals expensive during your working years.
There is an additional 20% tax on the
Publication 969 (2016), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2015-30 (IRS)
- Self-only
the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,350.
- Family
the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,750.
- HDHP minimum deductible, self-only
For calendar year 2016, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage
- HDHP minimum deductible, family
For calendar year 2016, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage
- HDHP out-of-pocket maximum, self-only
annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.
- HDHP out-of-pocket maximum, family
annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.