Can I Still Make a 2019 HSA Contribution?

Prior Year Contributions

Health Savings Accounts (HSAs) have some flexibility as to when you can make contributions for a particular year. The 2019 HSA contribution limits were $3,500 for individuals and $7,000 for families, but that amount didn’t have to be contributed in fiscal year 2019.

UPDATE AS OF MARCH 24, 2020: The federal income tax return filing deadline has been postponed from April 15, 2020 to July 15, 2020. Publication 969 states that you may make contributions to your HSA for 2019 at any time up to July 15, 2020. Be sure to comply with both state and federal law when filing taxes. You can find more information regarding this situation here.

How Do Prior Year Contributions Work?

Let’s say you opened an HSA in 2019 but didn’t make any contributions. At the beginning of 2020, you realized you wanted to utilize your HSA more this year. You can make a contribution now (in 2020) and put it toward 2019, but make sure you make your move before April 15th. 

In other words, when you make an HSA contribution between January 1st and April 15th (or that years tax deadline), you have the option to apply the amount to the previous year.

4 Reasons to Utilize Prior Year Contributions

1. Play “Catch Up” – Regardless of your age, HSAs can serve as a way to pay for qualified health expenses and a way to save for retirement. Because HSAs can be carried with you as you go, as well as the accompanying tax benefits, they have become a secret retirement weapon! It makes sense to contribute as much as you can to your HSA, which makes the prior year contribution a handy way to increase your HSAs balance.
2. Situations Change – While it makes sense to place money in your HSA as soon as you can for maximum growth time, we all know circumstances change. Since any money you contribute today helps you tomorrow, if you’ve found money at the beginning of the year you can use for your HSA, why not utilize a prior year contribution? 
3. Tax Planning – The money you contribute to your HSA is tax-deductible, meaning, you don’t have to pay taxes on it. If you foresee having a tax burden, you can shelter some of your money by contributing it to an HSA.
4. Maximize Your Healthcare Spending – Perhaps you’ve learned of a procedure you or a loved one needs later this year. By making a prior year contribution, you can maximize the tax benefits of the HSA and help pay for the associated treatment costs.

Thanks to prior year contributions, you still have time to make a 2019 HSA contribution. Don’t delay, you only have until April 15th, and the clock is ticking.