HSA Basics: 2026 Limits, HDHP Rules, Form 8889

A Health Savings Account (HSA) is a tax-advantaged account for medical costs. You open it with a trustee, such as a bank or insurance company. The IRS does not need to approve it. You must be an eligible individual to put money in it. IRS: Publication 969

This post covers tax year 2026. The 2027 limits are at the end.

Who can contribute

For a given year, you generally must meet all of these tests:

You are covered by a high deductible health plan (HDHP) on the first day of the month.
You have no other health coverage, except the kinds the IRS allows. Publication 969 lists them.
You are not enrolled in Medicare.
Another person cannot claim you as a dependent on their tax return.

There is also a special rule called the last-month rule. If you are eligible on December 1, you can usually contribute the full yearly amount, even if you were not eligible all year. You must then stay eligible through a testing period. That period runs through the end of the following year. IRS: Publication 969

What counts as an HDHP

An HDHP is a health plan with a higher deductible and a cap on what you pay out of pocket. For 2026, the plan must have a deductible of at least $1,700 for self-only coverage or $3,400 for family coverage. Your yearly out-of-pocket costs, not counting premiums, cannot be more than $8,500 for self-only coverage or $17,000 for family coverage. IRS: Rev. Proc. 2025-19

Ask your health insurer and your HSA trustee whether your plan and account meet the rules. Publication 969 says to ask both.

Contribution limits for 2026

For tax year 2026, the most you can put into an HSA is:

$4,400 with self-only HDHP coverage.
$8,750 with family HDHP coverage.

If you are 55 or older by the end of the year, you can add a $1,000 catch-up contribution. That amount is set by law and is not adjusted for inflation. IRS: Publication 969

The limit covers all money going in for you, from you, your employer, or anyone else. Congressional Research Service: Health Savings Accounts

If you are enrolled in Medicare, your limit is zero starting with the first month of Medicare coverage.

For 2025 contributions, the IRS allowed deposits until April 15, 2026. The same timing applies to 2026, so you can make 2026 contributions until April 15, 2027. IRS: Publication 969

Forms you will see

File Form 8889 with your Form 1040 if you had any HSA activity during the year. You must file it even if only your employer put money in. The form reports your contributions, your HSA deduction, and any withdrawals. IRS: About Form 8889

Your trustee sends two forms:

Form 5498-SA shows how much went into your HSA during the year. Employer contributions also appear in box 12, code W, of your Form W-2.
Form 1099-SA reports money paid out of your HSA. Keep it with your records and check that it matches your receipts.

The IRS describes both forms on its pages for Form 5498-SA and Form 1099-SA.

Tax benefits

You can deduct your own contributions even if you take the standard deduction.
Employer contributions are not included in your income.
Earnings in the account are not taxed while they stay in the HSA.
Withdrawals used for qualified medical expenses are tax-free.

Qualified medical expenses

Qualified medical expenses are medical care costs under the tax code, paid for you, your spouse, or your dependents. Insurance or another source must not have paid them. Menstrual care products count as medical care. An expense counts only if it happened after you set up the HSA. IRS: Publication 969

Keep receipts. You need records that show the withdrawal paid for medical care, that no one else paid for it, and that you did not deduct it on Schedule A. Do not send the records with your return.

Penalties

20% additional tax applies to withdrawals not used for qualified medical expenses. You still pay income tax on that amount. There is no additional tax after you become disabled, reach age 65, or die.
6% excise tax applies to excess contributions, each year the extra stays in the account. Withdrawing the excess by your return's due date, including extensions, can help you avoid it. Use Form 5329 to figure it.
10% additional tax can apply if you do not stay eligible during the last-month testing period. Part of the contribution then becomes taxable income.

All of these are described in Publication 969.

The 2027 limits

In June 2026, the IRS set the 2027 limits. The self-only limit is $4,500 and the family limit is $9,000. The catch-up stays at $1,000. For 2027, an HDHP must have a minimum deductible of $1,750 for self-only or $3,500 for family. Out-of-pocket maximums are $8,700 and $17,400. IRS: Rev. Proc. 2026-24

Checklist

Confirm that your HDHP coverage is in place, and that you have no other health coverage the IRS does not allow.
For 2026, note the limit: $4,400 self-only or $8,750 family, plus $1,000 if you are 55 or older.
Save receipts for every medical expense you pay from the HSA.
Look for Forms 5498-SA and 1099-SA, and file Form 8889 with your return.

General information, not advice for your return.

Sources: IRS Publication 969 (https://www.irs.gov/publications/p969); IRS Rev. Proc. 2025-19, 2026 limits (https://www.irs.gov/pub/irs-drop/rp-25-19.pdf); IRS Rev. Proc. 2026-24, 2027 limits (https://www.irs.gov/pub/irs-drop/rp-26-24.pdf); IRS: About Form 8889 (https://www.irs.gov/forms-pubs/about-form-8889); IRS: About Form 5498-SA (https://www.irs.gov/forms-pubs/about-form-5498-sa); IRS: About Form 1099-SA (https://www.irs.gov/forms-pubs/about-form-1099-sa); CRS R45277 Health Savings Accounts (https://www.congress.gov/crs-product/R45277) This is general information, not advice about your specific return.

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