On March 5, 2018, the IRS announced adjustments – effective immediately – to various annual limitations already in place for 2018. One such adjustment is to the maximum annual health savings account contribution for a family with high deductible health coverage. Previously set at $6,900 for 2018, the IRS has lowered the limit to $6,850, based on a change to the calculation of cost-of-living adjustments under the Tax Cuts and Jobs Act. (The maximum annual health savings account contribution limit for single coverage was not affected.) Employers sponsoring high deductible health plans will want to consider how to communicate this late-breaking change, and its impact, to their health plan participants. For example, individuals making contributions to their health savings accounts each payroll period may want to adjust their elections so as not to exceed the limit for 2018. Those who have already contributed the full $6,900 should consider seeking a distribution of the excess $50 contribution prior to the end of 2018 in order to avoid adverse tax consequences.
In the same guidance, the IRS also lowered the maximum per child adoption assistance credit for 2018 from $13,840 to $13,810. We have updated our previous limitations post to reflect these changes, and will continue to do so should further changes arise for 2018.
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