Increase in health savings account contribution limitation for certain individuals

(a) Increase (1) In general Section 223(b) is amended by adding at the end the following new paragraph: (9) Increase in limitation for certain taxpayers (A) In general The applicable limitation under subparagraphs (A) and (B) of paragraph (2) shall be increased by $4,300 and $8,550, respectively. (B) Limitation based on modified adjusted gross income The amount of the increase under subparagraph (A) (determined without regard to this subparagraph) shall be reduced (but not below zero) by the amount which bears the same ratio to the amount of such increase (as so determined) as— (i) the excess (if any) of— (I) the taxpayer’s adjusted gross income for such taxable year, over (II) $75,000 ($150,000 in the case of a joint return, if the eligible individual has family coverage), bears to (ii) $25,000 ($50,000 in the case of a joint return, if the eligible individual has family coverage). For purposes of the preceding sentence, adjusted gross income shall be determined in the same manner as under section 219(g)(3)(A), except determined without regard to any deduction allowed under this section.. (2) Only to apply to employee contributions Section 106(d)(1) is amended by inserting and section 223(b)(9) after determined without regard to this subsection. (b) Inflation adjustment Section 223(g), as amended by the preceding provisions of this Act, is amended— (1) by inserting, (b)(9)(A), (b)(9)(B)(i)(II), before and (c)(2)(A) each place it appears, (2) by striking clauses (ii) and (ii) in paragraph (1)(B)(i) and inserting clauses (ii), (iii), and (iv), (3) by striking and at the end of paragraph (1)(B)(ii), (4) by striking the period at the end of paragraph (1)(B)(iii) and inserting, and, and (5) by inserting after paragraph (1)(B)(iii) the following new clause: (iv) in the case of the dollar amounts in subsections (b)(9)(A) and (b)(9)(B)(i)(II), calendar year 2025.. (c) Effective date (1) Subsection (a) The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2025. (2) Subsection (b) The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2026.