Can You Use This Year's HSA to Pay Last Year's Bills?

One common question among HSA account holders is whether they can use funds from this year's HSA to pay for expenses incurred in the previous year. The answer to this question depends on several factors and guidelines set by the IRS.

Generally, you can only use HSA funds to pay for qualified medical expenses that occur after you have opened your HSA account. However, there are some exceptions that may allow you to use this year's HSA to cover expenses from the previous year:

• If you opened your HSA account in the previous year but did not contribute the maximum amount allowed, you can use this year's contributions to cover last year's expenses.
• If you had a high deductible health plan (HDHP) in both the previous and current years, you may be eligible to use funds from this year's HSA to pay for expenses from the prior year.

It's important to keep detailed records of your medical expenses and HSA contributions to ensure compliance with IRS regulations. Consult with a tax professional or financial advisor for personalized guidance on how to use your HSA funds effectively.

Are you wondering if you can dip into this year's HSA to settle the medical bills from last year? The short answer is: it depends! While the IRS has set certain rules, there are exceptions that may allow you to use funds from your current HSA for past expenses.