On March 1, 2018, the IRS released an updated version of Publication 969 for use in preparing 2018 individual federal income tax returns. While there are no major changes to the 2018 version (as compared to the 2017 version), the publication provides a general overview of HSAs, HRAs and health FSAs, including brief descriptions of benefits, eligibility requirements, contribution limits and distribution issues.
Minor changes include the 2018 limits for HSA contributions (the single-only contribution limit increased to $3,450 and the family contribution limit increased to $6,900). A note explains that the 2018 HSA contribution maximum for individuals with family coverage was lowered to $6,850 and then restored to $6,900. Taxpayers who received distributions of excess contributions because of the temporary limit reduction are informed that they may recontribute those distributions without adverse tax consequences.
Further, regarding the updated annual deductible and out-of-pocket maximums for HSA-qualifying HDHPs, the deductible limit increased to $1,350 for single-only coverage and $2,700 for family coverage, and the out-of-pocket maximum limit increased to $6,650 for single-only coverage and remained at $13,300 for family coverage. The publication also reminds employers that for plan years beginning in 2018, salary reduction contributions to a health FSA cannot be more than $2,650 per year.
The publication serves as a helpful guide for employers with these types of consumer reimbursement arrangements, particularly for employees that may have questions in preparing their 2018 individual federal income tax returns.
IRS Publication 969 »