In welcome news, the IRS reversed its course on the maximum annual health savings account contribution for a family with high deductible

health coverage. As you may recall, the IRS initially set the maximum 2018 HSA contribution for family coverage at $6,900. In March 2018, the IRS lowered that maximum to $6,850. Via Rev. Proc. 2018-27, the IRS announced its decision that—notwithstanding its March guidance—it would allow taxpayers to treat $6,900 (not $6,850) as the maximum family HSA contribution for 2018.

The IRS also provided relief for those taxpayers who had already contributed between $6,850 and $6,900 to an HSA for 2018, and then received a distribution of that excess amount plus earnings based on the IRS’s March guidance. Forms of relief include timely repaying the distribution to the HSA, retaining the distribution as an excess contribution, or, if attributable to employer contributions, using it to pay qualified medical expenses.