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Hello, was the HSA for family coverage or single coverage?
While I believe the answer is no penalty, I cannot find the code to back it up. I will opt out and let someone else assist as I only give answers I am 100% certain of.
Additional tax. There is an additional 20% tax on the part of your distributions not used for qualified medical expenses.Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR.Exceptions. There is no additional tax on distributions made after the date you are disabled, reach age 65, or die.
If that is your spouse account - distribution will be reported to your spouse - and your disability will not make any difference as long as she is not disabled.
However if you is the designated beneficiary of your spouse HSA, it will be treated as your HSA after your spouse death. In this case - distribution to you will be taxable but not subject to penalty.
You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA.In this case - there is no tax and no penalty.
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