125 Plans/Health Savings Account: When do you Pay Taxes on your HSA?

The only time you may pay taxes and penalties on your HSA funds is if you make a non-eligible purchase, or if you contribute more than the yearly maximum contribution limit. However, both circumstances can be corrected free of tax penalties by April 15th of the following calendar year.

Once you have reached age 65, you can withdraw your HSA funds at any time without penalty but the amount withdrawn will be taxed as ordinary income at your current tax rate.

Recent Posts