The IRS has released the 2014 inflation adjusted amounts for health savings accounts (HSAs). To qualify for an HSA, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements.
An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of the individual. Contributions, other than employer contributions, are deductible on the eligible individual’s return. Employer contributions are not included in income. Distributions from an HSA that are used to pay qualified medical expenses are not taxed.
Annual Contribution Limitation
For calendar year 2014, the annual limitation on HSA deductions for an individual with self-only coverage under an HDHP is $3,300. The annual limitation on HSA deductions for an individual with family coverage under an HDHP is $6,550.
High Deductible Health Plan
For calendar year 2014, a ‘high deductible health plan’ is defined as a health plan with an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,350 for self-only coverage or $12,700 for family coverage.
You can read more about HSAs in our section on Health Savings Accounts.