I used my HSA Debit Card for snacks at the convenience store. What do I do?

[BMcCalpin · Accepted solution]

The normal process is to call your HSA plan administrator and tell them you need the form for a "Mistaken Distribution".

The plan administrator does not have to honor this request, but if they do, then you will fill out the form and send them a check to repay the money you took out by mistake.

But I am assuming that this was not for a lot of money? And you did this in 2016?

In that case, rather than hold up your return, when you enter your 1099-SA, TurboTax will ask you if the whole distribution was for qualified medical expenses. You will answer "no", and indicate how much was for qualified medical expenses.

When you finish the HSA interview, TurboTax will add the difference (your snacks) to your income and then assess a 20% penalty on the excess.

But if the cost of the snacks was $10, then you would be adding $3 or $4 to your tax return. You might well figure that this is much cheaper than holding up your 2016 tax return.

It's your choice.