Financial Answer Center
Health Savings Accounts
- What Are Health Savings Accounts?
- Who Can Establish an HSA?
- How Much Can Be Contributed to an HSA?
- How Do You Establish an HSA?
- Who Can Make Contributions to an HSA?
- How Are Contributions Made to an HSA?
- Can You Make Contributions to an HSA if You Are Covered under an FSA or HRA?
- Can Your Contributions Earn Interest?
- How Are Contributions Taxed?
- How Are Distributions Taxed?
- What Are Qualified Medical Expenses?
- Are Rollovers Permitted?
- What Happens to Funds Remaining in Your HSA?
How Are Contributions Taxed?
Individual contributions you make to your HSA that do not exceed the maximum contribution limit are tax-deductible. Because you deduct these contributions "above-the-line" when calculating your adjusted gross income, you can deduct HSA contributions even if you do not itemize deductions on your federal income tax return. You can also deduct contributions made by a family member on your behalf.
If your employer makes contributions to your HSA, these are not included in your gross income. Thus, you do not have to pay income tax on the amount contributed by your employer. However, you cannot deduct the HSA contributions made by your employer on your tax return.
Interest and earnings on amounts in HSAs are not taxable.
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