My employment was terminated and I transferred my HSA to my spouse. Is there a tax implication? Thanks !!
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yes there is a tax implication. you made a disqualifying distribution. You cannot rollover or transfer an account balance to another person's HSA (including spouse). This would result in a taxable distribution (i.e., a distribution that was not used for a qualified medical expense). Rollovers and transfers are only tax free to the extent they go from your existing HSA to another HSA set up in your name.
just because your employment terminated there was no reason to do the transfer. what you did can't be undone because transferring the money from your spouse's HSA back to yours would also be another disqualifying distribution.
What do i need to do? Thanks !!
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