The Internal Revenue Service (IRS) has published Revenue Procedure 2020-32.
The new revenue procedure provides the 2021 inflation adjusted amounts for health savings accounts (HSAs), as determined under Section 223 of the Internal Revenue Code.
For calendar year 2021, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan (HDHP) is $3,600. The annual limitation on deductions for an individual with family coverage under a high-deductible health plan is $7,200.
The new limit for self-only coverage is up $50 from the 2020 limits, while the family limit has increased by $100.
Under the new Revenue Procedure 2020-32, for calendar year 2021, a “high-deductible health plan” is defined as “a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage,” and for which “the annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage.”
The revenue procedure is effective for calendar year 2021.