What are the tax advantages of HSA contributions?
Contributions made by the eligible individual HSA contributions made by an eligible individual or on behalf of an eligible individual are deductible by the eligible individual whether or not the eligible individual itemizes deductions. Note: The individual cannot also deduct the contributions as medical expense deductions. Employer contributions HSA contributions made by an employer to employees’ HSAs may be deducted by the employer. These contributions are excluded from the employees’ gross income, are not subject to withholding for income tax, and are not subject to the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), or the Railroad Retirement Tax Act (RRTA). Note: All contributions made through a cafeteria plan to an employee’s HSA are treated as employer contributions. The employee cannot deduct employer contributions on his or her federal income tax return as HSA contributions or as medical expense deductions: however, this contribution amount
