What Penalty is there for Withdrawing from an HSA?

Withdrawing money from your HSA (Health Savings Account) for non-qualified medical expenses can result in penalties.

The penalty for withdrawing funds from an HSA for non-qualified expenses is 20%.

It's important to use the funds in your HSA for eligible medical expenses to avoid penalties.

Penalty for Withdrawing from an HSA:

• The penalty for non-qualified withdrawals from an HSA is 20%.
• This penalty is in addition to the income tax you will owe on the withdrawn amount.

When considering withdrawing from your HSA, make sure the expenses are eligible to avoid penalties.

Withdrawing money from your Health Savings Account (HSA) for expenses that are not qualified can lead to significant financial penalties that you should be aware of.

If you withdraw funds from your HSA for non-qualified medical expenses, you will face a hefty penalty of 20% on the amount withdrawn.

Therefore, it is crucial to keep track of what qualifies as an eligible medical expense in order to maximize your HSA benefits and avoid penalties.