Member II

IRA to HSA

I heard I can move an IRA into a HSA fund. Is this true?

1 Comment
TurboTax Specialist

IRA to HSA

Yes, you can...but only once in a lifetime.

 

Note the limitation: the rollover is counted as part of the annual contribution to your HSA and is subject to the annual HSA contribution limit. Since this can't be larger than $7,750 in the best of cases, this limits the benefit that you can derive. However, it does mean that for one year, at least, you can stop sending money to your HSA and rollover some money from an IRA instead.

 

Also note that the rollover must be from an IRA in your name to an HSA in your name. No rolling over amounts to/from your spouse's or someone else's account.

 

To enter the rollover into TurboTax, please do the following:

1. Navigate to the screens to enter your 1099-R (Federal->Wages & Income->Retirement Plans & Social Security->IRA, 401(k), Pension Plan Withdrawals (1099-R)).

2. Enter your 1099-R information. Be sure to check the box that it is an IRA.

3. The distribution code in box 7 is probably '7' (normal distribution). 

4. When asked if this money was rolled into a Roth IRA, be sure to answer "No".

1099-R rollover to HSA - 1.jpg

5. After a screen or two, you should see this screen: "Did [name] Put This Money from ira to hsa in a Health Savings Account (HSA)?". Answer "Yes" and Continue.

1099-R rollover to HSA - 2.jpg

6. This will carry automatically to the HSA interview. 

1099-R dist on Lets enter your HSA contributions.jpg