Health Savings Account Limits Increased for 2022
Many credit unions offer a Health Savings Account (HSA) to their members, which allows saving for medical needs; and as an added incentive, contributions to an HSA can be deducted on federal income tax returns.
Contribution Limit For 2022
Health Savings Account contribution limits are adjusted every year for inflation. For 2022, the contribution limits are increased to $3,650 for individual and $7,300 for family coverage.
Anyone with an HSA who is over age 55 can contribute an extra $1,000 each year as a “catch-up” contribution.
To qualify for a Health Savings Account, individuals must be covered by a High Deductible Health Plan (HDHP), and medical expenses must not be reimbursable, and those medical expenses cannot qualify for a medical expense deduction on your federal tax return.
For the calendar year 2022, a qualifying High Deductible Health Plan must have:
- a deductible of at least $1,400 for self-only coverage or $2,800 for family coverage.
- an annual out-of-pocket limit of $7,050 for self-only coverage and $14,100 for family coverage.
Health Savings Account Tax Advantages
Tax Deductible Contributions – You can deduct contributions that you make to your HSA on your federal income tax return.
Pre-Tax Payroll Deductions – Any HSA contributions made through payroll deduction, you can reduce your federal income tax liability and Social Security and Medicare taxes.
Tax Free Withdrawals – When used for qualified medical expenses, withdrawals from your Health Savings Account are tax-free.
Tax Free Interest Income – Any interest income earned from a Health Savings Account is not subject to federal taxes.
Tax And Accounting For Credit Unions
For accounting for your credit union, give us a call.