HSA withdrawals for past years?
A hypothetical individual living in the US opened an HSA account in 2016. She was enrolled in a high deductible health care plan in 2016, 2017, and 2019.
She kept records of all her qualified medical bills totaling to $4000 from 2016 and 2017 but she did not need to tap into her HSA to pay for health care services.
Can she withdraw $4000 in 2019 from her HSA without penalties?
united-states hsa healthcare withdrawal
edited 9 hours ago
Chris W. Rea
26.5k1586174
asked 14 hours ago
AstroSharpAstroSharp
259312
add a comment |
A hypothetical individual living in the US opened an HSA account in 2016. She was enrolled in a high deductible health care plan in 2016, 2017, and 2019.
She kept records of all her qualified medical bills totaling to $4000 from 2016 and 2017 but she did not need to tap into her HSA to pay for health care services.
Can she withdraw $4000 in 2019 from her HSA without penalties?
united-states hsa healthcare withdrawal
edited 9 hours ago
Chris W. Rea
26.5k1586174
asked 14 hours ago
AstroSharpAstroSharp
259312
add a comment |
A hypothetical individual living in the US opened an HSA account in 2016. She was enrolled in a high deductible health care plan in 2016, 2017, and 2019.
She kept records of all her qualified medical bills totaling to $4000 from 2016 and 2017 but she did not need to tap into her HSA to pay for health care services.
Can she withdraw $4000 in 2019 from her HSA without penalties?
united-states hsa healthcare withdrawal
edited 9 hours ago
Chris W. Rea
26.5k1586174
asked 14 hours ago
AstroSharpAstroSharp
259312
A hypothetical individual living in the US opened an HSA account in 2016. She was enrolled in a high deductible health care plan in 2016, 2017, and 2019.
She kept records of all her qualified medical bills totaling to $4000 from 2016 and 2017 but she did not need to tap into her HSA to pay for health care services.
Can she withdraw $4000 in 2019 from her HSA without penalties?
united-states hsa healthcare withdrawal
united-states hsa healthcare withdrawal
edited 9 hours ago
Chris W. Rea
26.5k1586174
asked 14 hours ago
AstroSharpAstroSharp
259312
edited 9 hours ago
Chris W. Rea
26.5k1586174
asked 14 hours ago
AstroSharpAstroSharp
259312
edited 9 hours ago
Chris W. Rea
26.5k1586174
edited 9 hours ago
Chris W. Rea
26.5k1586174
edited 9 hours ago
Chris W. Rea
26.5k1586174
26.5k1586174
asked 14 hours ago
AstroSharpAstroSharp
259312
asked 14 hours ago
AstroSharpAstroSharp
259312
asked 14 hours ago
AstroSharpAstroSharp
259312
259312
add a comment |
add a comment |
2 Answers
2
active
oldest
votes
Yes.
From HSABank:
Can I use my tax-free HSA savings to pay for — or reimburse myself for — IRS-qualified medical expenses from a previous year?
Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time. Just be sure to keep sufficient records to show that these expenses were not previously paid for by another source or taken as an itemized deduction in any prior tax year.
IRS Pup 969 confirms this, but not as succinctly:
For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established.
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
1
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
2
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
add a comment |
The accepted answer is great, I just wanted to point out that this feature is why some people make maxing out HSA contributions a higher priority than IRA's. With an HSA you can get pre-tax contributions, tax-free growth, and tax-free disbursement if used on qualified medical expenses. The longer you wait to get reimbursed for qualified expenses the more tax-free growth you can get.
These rules could change in the future, but currently the HSA offers fantastic tax advantages.
answered 10 hours ago
Hart COHart CO
27.2k16481
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
add a comment |
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2 Answers
2
active
oldest
votes
2 Answers
2
active
oldest
votes
active
oldest
votes
active
oldest
votes
Yes.
From HSABank:
Can I use my tax-free HSA savings to pay for — or reimburse myself for — IRS-qualified medical expenses from a previous year?
Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time. Just be sure to keep sufficient records to show that these expenses were not previously paid for by another source or taken as an itemized deduction in any prior tax year.
IRS Pup 969 confirms this, but not as succinctly:
For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established.
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
1
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
2
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
add a comment |
Yes.
From HSABank:
Can I use my tax-free HSA savings to pay for — or reimburse myself for — IRS-qualified medical expenses from a previous year?
Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time. Just be sure to keep sufficient records to show that these expenses were not previously paid for by another source or taken as an itemized deduction in any prior tax year.
IRS Pup 969 confirms this, but not as succinctly:
For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established.
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
1
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
2
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
add a comment |
Yes.
From HSABank:
Can I use my tax-free HSA savings to pay for — or reimburse myself for — IRS-qualified medical expenses from a previous year?
Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time. Just be sure to keep sufficient records to show that these expenses were not previously paid for by another source or taken as an itemized deduction in any prior tax year.
IRS Pup 969 confirms this, but not as succinctly:
For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established.
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
Yes.
From HSABank:
Can I use my tax-free HSA savings to pay for — or reimburse myself for — IRS-qualified medical expenses from a previous year?
Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time. Just be sure to keep sufficient records to show that these expenses were not previously paid for by another source or taken as an itemized deduction in any prior tax year.
IRS Pup 969 confirms this, but not as succinctly:
For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established.
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
answered 13 hours ago
D StanleyD Stanley
51.9k8151161
51.9k8151161
1
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
2
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
add a comment |
1
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
2
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
1
1
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
@D Stanely: "Just be sure to keep sufficient records to show that these expenses were not previously paid". How do you keep records proofing that something DIDN'T happen? You can record and event or transaction but how do you document a non-action ?
– Hilmar
12 hours ago
2
2
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar That's a good question, and luckily I've never been through an audit to know. Maybe receipts showing that you paid the expense is sufficient?
– D Stanley
12 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
@Hilmar I'd expect tax returns from all years between the expense and filing for reimbursement would suffice. No idea whether there's an easier way.
– Kevin
9 hours ago
add a comment |
The accepted answer is great, I just wanted to point out that this feature is why some people make maxing out HSA contributions a higher priority than IRA's. With an HSA you can get pre-tax contributions, tax-free growth, and tax-free disbursement if used on qualified medical expenses. The longer you wait to get reimbursed for qualified expenses the more tax-free growth you can get.
These rules could change in the future, but currently the HSA offers fantastic tax advantages.
answered 10 hours ago
Hart COHart CO
27.2k16481
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
add a comment |
The accepted answer is great, I just wanted to point out that this feature is why some people make maxing out HSA contributions a higher priority than IRA's. With an HSA you can get pre-tax contributions, tax-free growth, and tax-free disbursement if used on qualified medical expenses. The longer you wait to get reimbursed for qualified expenses the more tax-free growth you can get.
These rules could change in the future, but currently the HSA offers fantastic tax advantages.
answered 10 hours ago
Hart COHart CO
27.2k16481
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
add a comment |
The accepted answer is great, I just wanted to point out that this feature is why some people make maxing out HSA contributions a higher priority than IRA's. With an HSA you can get pre-tax contributions, tax-free growth, and tax-free disbursement if used on qualified medical expenses. The longer you wait to get reimbursed for qualified expenses the more tax-free growth you can get.
These rules could change in the future, but currently the HSA offers fantastic tax advantages.
answered 10 hours ago
Hart COHart CO
27.2k16481
The accepted answer is great, I just wanted to point out that this feature is why some people make maxing out HSA contributions a higher priority than IRA's. With an HSA you can get pre-tax contributions, tax-free growth, and tax-free disbursement if used on qualified medical expenses. The longer you wait to get reimbursed for qualified expenses the more tax-free growth you can get.
These rules could change in the future, but currently the HSA offers fantastic tax advantages.
answered 10 hours ago
Hart COHart CO
27.2k16481
answered 10 hours ago
Hart COHart CO
27.2k16481
answered 10 hours ago
Hart COHart CO
27.2k16481
answered 10 hours ago
Hart COHart CO
27.2k16481
27.2k16481
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
add a comment |
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
* Except CA and NJ w.r.t. state taxes, and some potential dividend and interest issues in NH and TN. src. Still definitely worth it just for the federal deduction though.
– Kevin
8 hours ago
add a comment |
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