• FREE RESOURCES
        • Accounts Payable
          Finally! The trick to securing greater T&E compliance
          Benefits
          Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist
          IT
          3 costly misconceptions about biz email compromise
          Credit and Collections
          Collecting via email: 4 must-make moves in your subject line
          Accounts Payable
          5 Tough-to-spot signs that an invoice is fake
  • PREMIUM CONTENT
        • Staff management
          120 Proven Communications Tips for Today’s CFO
        • Payroll
          Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits
          Accounts Payable
          T&E Best Practices: Complete Guide to Ensure Compliance
          Payroll
          Payroll Best Practices: 4 Ways to Save Time and Money
        • Staff management
          Email Best Practices: A 6-Question Quiz
          Staff management
          Innovative Communications Strategies: An Email Case Study
          Staff management
          A 5-part Framework for Successful Workplace Communications
        • SEE MORE
          PREMIUM RESOURCES
  • CORONAVIRUS RESOURCES
  • LOGIN
  • SIGN UP FREE

CFO Daily News

  • FREE RESOURCES
        • Accounts Payable
          Finally! The trick to securing greater T&E compliance
          Benefits
          Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist
          IT
          3 costly misconceptions about biz email compromise
          Credit and Collections
          Collecting via email: 4 must-make moves in your subject line
          Accounts Payable
          5 Tough-to-spot signs that an invoice is fake
  • PREMIUM CONTENT
        • Staff management
          120 Proven Communications Tips for Today’s CFO
        • Payroll
          Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits
          Accounts Payable
          T&E Best Practices: Complete Guide to Ensure Compliance
          Payroll
          Payroll Best Practices: 4 Ways to Save Time and Money
        • Staff management
          Email Best Practices: A 6-Question Quiz
          Staff management
          Innovative Communications Strategies: An Email Case Study
          Staff management
          A 5-part Framework for Successful Workplace Communications
        • SEE MORE
          PREMIUM RESOURCES
  • CORONAVIRUS RESOURCES
  • Accounts Payable
  • Credit and Collections
  • Payroll
  • Accounting
  • Benefits
  • Finance Technology
  • More
    • Employment Law
    • Strategy
    • Policy and Culture
    • Fraud
    • Payments and Transactions
    • Budgeting and Forecasting
    • Banking
    • Staff Management
    • Cost Control
    • Supply Chain
    • IT

IRS offers new guidance on correcting HSA deduction errors

Jennifer Azara
by Jennifer Azara
March 1, 2019
  • Benefits
  • Payroll
2 minute read
  • SHARE ON

You know it’s a great one-two punch for containing healthcare costs: Pair a high deductible health plan (HDHP) with a health savings account (HSA). These days more and more employees are signing on, which means more contributions for your payroll team to handle.

So what happens if they make a mistake with an HSA contribution? Of course, Payroll prides itself on its collective precision, but they’re only human. And errors can creep in … sometimes even for reasons out of their control.

Which is why a recently released Chief Counsel letter is such good news.

It outlines a whole series of possible contribution mistakes where your company can recoup the cash. Here’s what you need to know:

Tell your team not to sweat these

In the past IRS had identified two circumstances under which Payroll can recoup HSA contributions made in error:

  • if they exceeded the maximum annual limit, and
  • if the employee wasn’t eligible to participate in the first place.

But this latest Chief Counsel letter offers you several other common scenarios you might find yourself in.

Make sure Payroll realizes – you can also likely recoup the contribution outright in these seven instances, too:

  1. deductions are higher than the employee specified
  2. contributions went to the wrong employee
  3. a payroll administrator (in-house or third party) enters an incorrect amount for the deduction
  4. duplicate payroll files are transmitted, giving an employee a double HSA contribution
  5. an employee’s change to a payroll election isn’t processed in time, so the wrong amount is withheld
  6. the amount the employee receives is incorrect due to a calculation error, such as using the wrong number of pay periods to calculate the total deduction for the year, and
  7. a decimal place is moved, causing a too-large contribution.

What you’re working with in 2019

To make sure your team is working with the right numbers for this year, here’s a refresher on the current HAS and HDHP limits for 2019, according to Revenue Procedure 2018-30:

  • The maximum HSA contribution for an individual with self-only HDHP coverage: $3,500 (up $50).
  • The maximum HSA contribution for family HDHP coverage: $7,000 ($100 over the current $6,900).
  • The maximum amount for an HDHP out of pocket for self-only coverage (including deductibles, co-pays and co-insurance – but not premiums): $6,750 (up $100).
  • The max out-of-pocket limit for an HDHP participant with a family plan: $13,500 (up $100).
  • The minimum deductible HDHP coverage holds steady: $1,350 for self-only and $2,700 for family coverage.
Jennifer Azara
Jennifer Azara
Jennifer, a member of the CFO Daily News staff, has covered business and finance for more than 22 years. She has written for CFOs, credit and collections professionals and accounts payable practitioners and has spoken at industry conferences on sales and use tax compliance.

Keep Up To Date with the Latest Finance News

With CFO Daily News arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies.

Sign up for a free CFO Daily News membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
CFO Daily News Logo
  • ABOUT CFO DAILY NEWS
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Accounting
  • Benefits
  • Payroll
  • Policy and Culture
  • Employment Law
  • Fraud
  • Finance Technology
  • Accounts Payable
  • Credit and Collections
  • Strategy
  • Payments and Transactions
  • Budgeting and Forecasting
  • Banking
  • Staff Management
  • Cost Control
  • Supply Chain
  • IT

CFO Daily News, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, CFO Daily News delivers actionable insights, helping Finance execs understand what Finance trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

preloader