Skip to main content
April 5, 2023
Question

How long do I have to repay my H.S.A. if I accidently used H.S.A. funds for non medical expenses in 2022?

  • April 5, 2023
  • 2 replies
  • 0 views
No text available

2 replies

April 5, 2023

Contact your plan administrator to report the error, find out the procedure for a repayment to your HSA account, and request a corrected 1099-SA form. 

 

If you received a distribution during the year from your HSA due to a mistake (reasonable cause), you may repay the mistaken distribution no later than April 15 of the following year you knew or should have known the distribution was a mistake.

  • Under these circumstances, the distribution is not included in gross income, is not subject to the 20% additional tax, and the repayment is not subject to the excise tax on excess contributions. 
  • The repayment will not be reported as a contribution on Form 5498-SA.

You'll get Form 1099-SA if you paid for medical or other expenses from your HSA or MSA during the tax year.

Here's how to add it in TurboTax:

  1. Open or continue your return in TurboTax
  2. Select Search and enter 1099-SA
  3. Select Jump to 1099-sa
  4. Answer the questions and continue through the screens

 

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"
JMCPAAuthor
April 10, 2023

Thank you! Super helpful. Problem now is my H.S.A. custodian refuses to send me a corrected 1099-SA. Do you just file the corrected number on my 22 return and send a letter when the IRS rejects the return? My H.S.A. Custodian said it will include the corrected FY22 amount in my FY23 1099-SA. Will the IRS just be patient for a year then?

Employee
April 10, 2023

@JMCPA wrote:

Thank you! Super helpful. Problem now is my H.S.A. custodian refuses to send me a corrected 1099-SA. Do you just file the corrected number on my 22 return and send a letter when the IRS rejects the return? My H.S.A. Custodian said it will include the corrected FY22 amount in my FY23 1099-SA. Will the IRS just be patient for a year then?


The custodian is correct, and the IRS will eventually catch up.

Employee
April 12, 2023

"How long do I have to repay my H.S.A. if I accidently used H.S.A. funds for non medical expenses in 2022?"

 

The proper answer depends on the nature of the distribution.  If you reasonably thought that the distribution was being used for a qualified medical expense, then HelenC12's answer applies.

 

However, if the mistake was just that you did something like use your HSA debit card to pay for something you knew was not a qualified medical expense, the money would have to be put back into the HSA by rollover where you have only 60 days co complete the rollover (and is permitted to be done only if you had done no other rollover within the 1-year period ending on the date of the distribution).  If you did not roll over such a distribution by the 60-day deadline, the distribution is not permitted to be put back into the HSA and to make the distribution nontaxable you would have to be able to apply it to a qualified medical expense.