Opening an HSA mid-year: how much can I contribute to it?

Question

I opened an HSA account in the United States during the year: what's my maximum contribution? Is it the annual maximum (i.e., 3400 USD in 2017), or should I prorate (e.g., if I started at the beginning of September, I could only contribute 3400*4/12 USD)?

Answer 1

The annual allowed maximum is the entire annual allowed maximum for the year provided you were enrolled in a qualified HDHP by December 1 of the year and have not made contributions to an MSA (or the like) that would require a direct offset, there is no prorating necessary.

IRS Cite

Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers).

It's worth pointing out that it takes more than simply the benefits summary cited deductible in order for a plan with a "high deductible" to meet the criteria of an HSA qualified "high deductible health plan (HDHP)."

Answer 2

Your HSA contribution is not limited by when you opened the HSA account; you could theoretically open the HSA account on December 31 and contribute the full year's contribution.

However, your contribution may be limited if you did not have an HSA-eligible High Deductible Health Plan (HDHP) in place since the beginning of the year. See this question-and-answer for more details on prorating the limits if you only had HDHP coverage for part of the year and on the use of the "last month rule."