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Is there a provision tax free transfer from a HSA to a Roth

Customer Question
Is there a provision for...
Is there a provision for a tax free transfer from a HSA to a Roth IRA? Is there an income limitation?
Submitted: 2 years ago.Category: Tax
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Answered in 12 minutes by:
11/17/2015
Tax Professional: Anne, Master Tax Preparer replied 2 years ago
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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Hi Jeff

I'm Anne. I've been preparing taxes for 27 years and I'll be happy to help you.

If you transfer your HSA funds to a Roth IRA, you will not only pay taxes on the money you withdraw, but you will also pay a 20% penalty. Please see below:

http://finance.zacks.com/can-roll-hsa-contributions-roth-ira-6680.html

If you have questions please post them here & I'll be notified.

If this information helped you, then please take the moment to rate positive by checking the stars

It is only through positive ratings that we are compensated for our time and knowledge

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Customer reply replied 2 years ago

Hmmm... maybe I had it backwards.

Can I transfer funds from a NON-Roth, regular IRA to an HSA?

I thought there was a one-time option to do this for $5,000.

Tax Professional: Anne, Master Tax Preparer replied 2 years ago

Hi again Jeff

First, let me apologize for the delay in answering your follow up question. Normally these hit our que, and will prevent us from answering any other questions until we take care of someone who has a follow up question (and I totally agree with that process)

For some unknown reason, that didn't happen this time.

You are correct that you may make a one time option to transfer funds from a Traditional IRA to your HSA, however, the $amount is limited to the maximum HSA contribution for the year minus any contributions you've already made for the year.

For 2015 the HSA contribution limit is $3350 for single coverage and $6650 for family coverage. Please see below:

http://www.kiplinger.com/article/insurance/T027-C001-S003-rules-for-ira-to-hsa-rollovers.html

http://www.hsacenter.com/2015-hsa-contribution-limits.html

I hope this helps.

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Tax Professional: Anne, Master Tax Preparer replied 2 years ago

Hi Jeff

tI see that you read my answer, but didn't rate it. Do you have any questions or concerns that I can help you with?

Please remember that it is only through positive ratings (by checking the stars) that we are compensated for our time and knowledge

Thank you for choosing justanswer

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Anne
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
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