Will The Distribution From My HSA Be Tax & Penalty-Free?

An HSA account is one of the most tax-efficient savings accounts available to investors.  While many of the distribution rules are straightforward, there are several factors and exceptions that should be considered before a client takes a distribution from their HSA including:

 

  • Classification as a Qualified Medical Expense
  • Eligibility of LTC insurance premium payments
  • Eligibility of health insurance premium payments
  • Impact if the distribution occurs before/after turning age 65
  • Use of HSA funds to pay Qualified Medical Expenses of family members
  • Timing of expenses

Updated 6/23/2020