Question

On our HSA 60-day Rollover, which Amount to Rollover?

Forum|Forum|6 years ago
July 17, 2019
1 reply
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My husband's HSA was charged a $25 closing fee when he closed the account with an old HSA provider. Now that he wants to rollover the HSA amount, he called the old HSA provider to double-check what amount they'll be reporting as gross distribution and they said it will be the amount before the closing fee. Is that correct?

Should we rollover the amount NET of the closing fee - which is the exact amount we received?

Thanks in advance!

TurboTax Deluxe Windows

D

dmertz

Employee

If the Form 1099-SA will report as the gross amount the amount before subtracting the $25 fee, your husband needs to add $25 from another source to make up the difference and roll over the entire distribution, otherwise the $25 will be treated as distributed but not rolled over. Alternatively he could roll over the net amount and apply the $25 to any unreimbursed medical expense incurred after the date on which the original HSA was established. If the $25 is not rolled over and is not applied to a qualified medical expense, the $25 will be subject to tax and, if your husband was under age 65 at the time of the distribution, to a 20% ($5) additional tax.