HSA Withdrawal funds help.

[Justin.martin200]

If you took out HSA funds for a withdrawal, for example, lets say you took out HSA dollars in January that were not due to a medical qualified event, and then you pay out of pocket for a medical bill in April that is for a medical qualified event, could you then count the HSA dollars you took out in January as a reimbursement to the out of pocket expense incurred in April, or would you have to count it as income?

[BMcCalpin · Accepted solution]

Technically, any distribution taken for reasons other than to "reimburse" you for a qualified medical expense is not a qualified distribution. "Reimburse" implies that you already paid for the qualifying medical expense, not for some future event.

You are not intended to willy-nilly withdraw money from the HSA in the hopes that you might spend it in the future on medical bills.

What was the reason you withdrew the money in January? Was it for something other than to maybe pay medical bills in the future? If so, just go ahead and report that it was not a qualified distribution and pay the penalty...and next time, be sure to take the distribution AFTER you incur the medical expense.

[Justin.martin200]

Okay, I have my reasons, however I thank you for the response. Very helpful. My next question is, if you paid for a medical expense out of pocket do you have to wait until you have the full amount you paid out of pocket or can you reimburse yourself a 100.00 at a time if you wanted until it equals out to what you paid out of pocket?