What is the tax treatment of an eligible individual’s HSA contributions?
Contributions made by an eligible individual to an HSA are deductible by the eligible individual in determining adjusted gross income (i.e., above-the-line). The contributions are deductible whether or not the eligible individual itemizes deductions. However, the individual cannot also deduct the contributions as medical expense deductions under section 213.
When you make an eligible contribution to an HSA, the amount of your contribution (up to the maximum contribution limit discussed above) is deductible in computing your adjusted gross income. This means that your contributions are deductible whether or not you itemize deductions. In addition, any person who may be claimed as a dependent on another taxpayer’s return may not claim a deduction for a contribution to an HSA. A special rule applies to certain married individuals. If either spouse has family coverage under an HDHP, both spouses shall be treated as having only such family coverage (and if such spouses each have family coverage under different plans, as having the family coverage with the lowest annual deductible). The amount allowable as a deduction after application of this rule shall be divided equally between the spouses unless they agree on a different division.
