IRA Rollover into HSA
Just wondering about the rules and potential contribution limits for rolling over an IRA into an HSA.
- Can you rollover more than the annual limit for HSA Contributions.
- Rules for HDHP enrollment and Medicare enrollment pre- and post- rollover.
- Penalties if not done correctly.
Permalink Submitted by Alan - IRA critic on Tue, 2025-06-24 12:25
The max rollover is limited to the annual HSA contribution limit, and is applies to that limit.
The HDHP limit remains in place and the HSA contribution limit ends once enrolled in Medicare.
The qualified HSA funding distribution is allowed only one time and is done by direct transfer to the HSA and must be reported on Form 8889. This is overrated because there is no deduction for the HSA contribution and the IRA balance is reduced. There is also an HSA 12 month testing period during which you must remain eligible for HSA contributions. If you do not meet this requirement, the IRA transfer must be included in income for the year of failure, and the 10% penalty may also apply.
Suggest you read Pub 969, p 7 for more detail before requesting such a transfer.