![]() ![]() Unless your domestic partner qualifies as your dependent under the federal tax laws you cannot withdraw funds tax-free to pay for your domestic partner's qualified health care expenses. The IRS does not consider a domestic partner a spouse, regardless of any state law exceptions. So if you choose in a future year to enroll in a non-HDHP medical insurance option, your HSA funds will still be available to pay for qualified health care expenses. However, any distributions you make from an existing HSA for qualified expenses continue to be tax-free and excludable from your gross income. When you are no longer covered by a qualified HDHP, you are not eligible to contribute to an HSA. Using HSA Funds When Not Enrolled In High Deductible Health Insurance ![]() Because you are ultimately responsible for determining which expenses are reimbursable from your HSA, you should consult with your personal tax advisor to determine how IRS guidance on this issue should be applied to your specific situation. Generally, the “Establishment Date” is the later of the effective dates of your qualifying HDHP coverage or the date you provide evidence of intent to open the account (e.g., completion of a form or application requiring your signature that acknowledges your desire to open an HSA). The "Establishment Date" of an HSA is important because you can only receive tax-free distributions from your HSA for qualified medical expenses incurred after the date the HSA is considered established. Expenses Must Be Incurred After HSA "Establishment Date" It is your responsibility to keep all documents (such as receipts) that show how you used your HSA, including for non-qualified transactions, and self-report accordingly on your annual tax return. The IRS requires that you confirm your distributions are for qualified medical expenses. ![]() If you take a non-qualified distribution, you are subject to ordinary income tax on the distribution and a 20% penalty tax. is not yet age 19 (or not yet age 24 if a student) at the end of the tax year or is permanently and totally disabled.has not provided over one-half of their own support during the taxable year and.has the same principal place of abode as the covered employee for more than one-half of the taxable year,.According to the IRS definition, a dependent is a qualifying child (daughter, son, stepchild, sibling or stepsibling or any descendant of these) who: The IRS has not changed its definition of a dependent for health savings accounts. Your HSA funds can be used to pay for out-of-pocket qualified medical expenses incurred by your family members who qualify as your dependents for tax purposes. Therefore, you should become familiar with the Internal Revenue Service (IRS) definitions and also keep your receipts in case you need to defend your expenditures or decisions during an audit. You are responsible for deciding whether the payment is for a qualified medical expense. Refer to IRS Publication 502 for a more complete list of qualified medical expenses. ![]()
0 Comments
Leave a Reply. |