HSA tricky question

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math22
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Joined: Wed Jan 13, 2016 8:11 pm
Location: USA

HSA tricky question

Post by math22 » Fri Dec 16, 2016 8:29 pm

I started using high deductible health + HSA in 2013. That year i funded it with only $500 but ended up spending $1700 in qualified medical expenses.
Now I have more than 15K in the HSA account. Can I use the receipts from 2013 to get a distribution of $1200?

Nate79
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Location: Portland, OR

Re: HSA tricky question

Post by Nate79 » Fri Dec 16, 2016 8:48 pm

Yes. You can pay the expenses at any time in the future.

2retire
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Re: HSA tricky question

Post by 2retire » Fri Dec 16, 2016 8:59 pm

The number is low, so you probably didn't do it, but be aware, that you can not have itemized those medical cost on your taxes as the time. If you itemized the medical costs on your taxes, then you can't double dip and use the HSA funds to pay them as well.

math22
Posts: 57
Joined: Wed Jan 13, 2016 8:11 pm
Location: USA

Re: HSA tricky question

Post by math22 » Fri Dec 16, 2016 9:07 pm

the tricky part is that my hsa account did not have funds at the time the medical expenses occurred. I know we can pay the expenses any time in the future but even in this situation?

Nate79
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Location: Portland, OR

Re: HSA tricky question

Post by Nate79 » Fri Dec 16, 2016 9:17 pm

As long as it was opened and funded prior to the expenses then it shouldn't be a problem to reimburse at a later date no matter the balance of the HSA at the time.

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celia
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Re: HSA tricky question

Post by celia » Fri Dec 16, 2016 9:45 pm

OP is asking if the HSA can be funded for past medical expenses when he was eligible to fund the account for more, but didn't.

(I don't know but am curious as to the answer.)

Spirit Rider
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Re: HSA tricky question

Post by Spirit Rider » Fri Dec 16, 2016 10:14 pm

Yes, reference IRS Notice 2004-50 Q&A 39 and the following example. Note: The amount of the funding and its relationship to the limit for year of the expense is irrelevant.

Example. An eligible individual contributes $1,000 to an HSA in 2004. On December 1, 2004, the individual incurs a $1,500 qualified medical expense and has a balance in his HSA of $1,025. On January 3, 2005, the individual contributes another $1,000 to the HSA, bringing the balance in the HSA to $2,025. In June, 2005, the individual receives a distribution of $1,500 to reimburse him for the $1,500 medical expense incurred in 2004. The individual can show that the $1,500 HSA distribution in 2005 is a reimbursement for a qualified medical expense that has not been previously paid or otherwise reimbursed and has not been taken as an itemized deduction. The distribution is excludable from the account beneficiary’s gross income.

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