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RS Lowers 2018 Family HSA Contribution
The 2018 contribution limit for health savings accounts (HSAs) linked to family coverage will be $6,850—not $6,900, as the IRS had previously announced. The IRS recalculated the limit because the Tax Cuts and Jobs Act that passed at the end of 2017 applies the so-called chained consumer price index (chained CPI) to increases in HSA and a few other employee benefit contribution limits.
On March 5, the IRS clarified that for HSAs, the annual tax-deductible contribution limit for tax year 2018 will stay at $3,450 for HSA account holders with self-only coverage through a high-deductible health plan but has been lowered to $6,850 for account holders with family coverage through a high-deductible plan.
Because these changes apply to tax year 2018, employees contributing to an HSA may need to make adjustments in contributions for the remainder of 2018. In situations where employees have already contributed the maximum amount for 2018, they will need to receive a refund of the excess contribution.
Change to New York Paid Family Leave Withholdings
New York State recently revised its interpretation of the New York Paid Family Leave law that went into effect on January 1, 2018. Previously, employers were required to withhold the lesser of 0.126% of an employee’s weekly wages or $1.65 per week with an annual limit of $85.56. The weekly cap has been removed and employers should now withhold 0.126% of an employee’s wages, however the annual limit still applies.
For more information on the New York Paid Family Leave law please visit their website or contact our Director of Human Resources, Caroline Organ at 716-854-5034 or cmo@bspcpa.com.