Can I transfer funds from my IRA into my HSA and vice versa?

The government does allow a one-time transfer of funds from an IRA to an HSA. However, you can only roll your HSA funds into another HSA not an IRA.

– The transferred amount, when combined with other HSA contributions for the year, may not exceed your annual maximum contribution.

– Also, after making such a transfer, you must continue to participate in a qualifying high-deductible health plan for 13 consecutive months, beginning in the month of the IRA-to HSA transfer. If you do not, you will be subject to income taxes and a 20 percent penalty tax on the transferred amount, except in the case of death or disability.

– Such a transfer may be an option if you incur significant medical expenses and find yourself unable to afford to make the maximum HSA contribution.

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Posted on

September 15, 2021