Overview

A new IRS notice extends the deadline for individuals to make health savings account (HSA) contributions from April 15, 2020 to July 15, 2020.  The IRS issued the notice to provide taxpayers with various tax filing and payment deadline extensions in response to the ongoing COVID-19 emergency.

In Depth

In response to the COVID-19 emergency, the IRS has issued Notice 2020-18, which extends certain tax filing and payment deadlines.  All taxpayers with filing or payment deadlines of April 15, 2020 are eligible for relief under the Notice, regardless of whether they are directly impacted by COVID-19 (for example, due to illness or quarantine).  The Notice extends the deadline for individuals to make contributions to their health savings accounts from April 15, 2020 to July 15, 2020.

HSAs allow individuals who are covered under high-deductible health plans (HDHPs) to contribute an amount up to IRS limits ($3,550 for individual coverage and $7,100 for family coverage in 2020), which is used to pay for certain eligible medical expenses on a pre-tax basis.  HSA contributions are typically due by the federal income tax filing deadline of April 15.  Because that deadline has now been extended to July 15, 2020, the IRS has also extended the deadline to make HSA contributions until the new filing deadline.

Earlier this month, the IRS allowed individuals covered by an HDHP to receive testing and care for COVID-19 without a deductible, or with a deductible below the HDHP minimum, without disqualifying the individual from making or receiving HSA contributions (see our previous On the Subject here).