HSA, FSA Taxes and Contribution Limits for 2025-2026

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What is a health savings account (HSA)?
- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.
2025 HSA contribution limits
Self | Family | Catch-up contribution (ages 55+) |
---|---|---|
$4,300. | $8,550. | $1,000. |
2026 HSA contribution limits
Self | Family | Catch-up contribution (ages 55+) |
---|---|---|
$4,400. | $8,750. | $1,000. |
What is a flexible spending account (FSA)?
FSA contribution limit 2025
- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.
How do HSA and FSA contributions work?
HSA contributions
- If your health savings account is based on a high-deductible health plan you get through work, your employer might set up payroll deductions on your account, meaning the money will go into your health savings account tax-free.
- If you make HSA contributions directly, you may be able to claim a tax deduction for that amount when you file your tax return. You don't have to itemize to claim the HSA deduction.
- If you're looking for a last-minute way to cut your tax bill, note that you have until the annual tax filing deadline to put money into an HSA for the prior tax year.
FSA contributions
- Once you set up your flexible savings account at work, the contributions automatically come out of your paycheck and go into your account each pay period.
- Good news: The money is contributed before tax, so your payroll tax bill should be a bit smaller.
How do I access the money in my FSA or HSA account?
- With an FSA, typically you either use a debit card tied to the account, or you pay out of pocket and then submit receipts to the FSA administrator so you can get reimbursed. Using an FSA debit card is usually easier, but remember that you may be asked to provide receipts to prove your purchases were eligible medical expenses.
- With an HSA, you’ll probably receive a debit card linked to your HSA account. Along with other annual tax forms, your HSA manager will issue a Form 1099-SA showing distributions from the account. Keep receipts and documentation of what you spent the money on, in case the IRS questions your tax deduction.
What if I don't use all the money?
Health savings accounts (HSAs)
- HSA money is yours — there are no deadlines to withdraw funds, even if you no longer have the same high-deductible health plan. You can even invest your HSA money in mutual funds or other securities, and the money can continue to grow tax-deferred and be used tax-free to pay for qualifying medical expenses at any time.
- Use HSA money for medical reasons, though. If you're under 65 and use the funds for other purposes, that money becomes taxable income, and you could face an additional 20% tax on the nonmedical use of HSA money.
- Once you turn 65, you can use HSA money for anything, but you'll owe tax on withdrawals that aren't used to pay medical expenses.
Flexible spending accounts (FSAs)
- Rollovers: Some workplaces also allow employees to roll over a portion of the unused funds into next year’s account. The IRS limits FSA rollovers to $660 in 2025.
- Grace period: Some workplaces also allow a few months’ grace period to spend FSA funds from the previous year, but they are not required to do so. Grace periods typically go to mid-March.
Article sources
- 1. Internal Revenue Service. Rev. Proc. 2024-25. Accessed Sep 24, 2024.
- 2. Internal Revenue Service. Rev. Proc. 2025-19. Accessed May 1, 2025.
- 3. Internal Revenue Service. About Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Accessed Sep 24, 2024.
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