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webbamy32
New Member

I have an HRA account which I put money into every year - can i deduct that?

 
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3 Replies
DavidD66
Expert Alumni

I have an HRA account which I put money into every year - can i deduct that?

Health Reimbursement Arrangements (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement.  According to IRS regulations, HRAs can only be funded by the employer. Participants in the HRA aren’t allowed to contribute—a distinction that often gets confused with HSAs and FSAs, which are accounts that allow for both employee and employer contributions.  Are you the employer, or do you have an HSA or FSA?

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Carl
Level 15

I have an HRA account which I put money into every year - can i deduct that?

If you are a W-2 employee, any contributions to an HSA account from your gross pay are shown in box 12 with code R, FF, or code W, depending on the type of plan. For an HSA it would be code W. The amount reported in box 12 using any of those codes is not included in box 1 of your W-2. So you can't deduct it again, as that would be double-dipping.

If you are self-employed or have something else that is eligible for favorable tax treatment then it's covered in IRS Publication 969 at https://www.irs.gov/pub/irs-pdf/p969.pdf

I have an HRA account which I put money into every year - can i deduct that?

No, you don't put money into an HRA, unless your employer is breaking the law.

 

You might have an HSA.  The differences are explained here.

https://www.irs.gov/forms-pubs/about-publication-969

 

Contributions made to an HSA via payroll deduction are reported on your W-2 and automatically handled by Turbotax.  They are already taken out of your paycheck before taxes, so you can't take another tax deduction for them.  Contributions that you make directly to the HSA bank out of pocket are tax deductible, assuming you have qualifying medical coverage, usually called a High Deductible Health Plan or HDHP.

 

If you have not been deducting this in the past, you may need to file amended returns.

 

If you have been making contributions but don't have a qualifying HDHP, you may owe significant penalties. 

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