George wrote:
- quote -


- quote -

A: Yes.

Q: Will you have to pay tax (and possibly penalty) on the distribution?

A: maybe.

I'd ask first, what *were* her unreimbursed expenses during the time she
was on your insurance, other than co-pays? Are they qualified? etc.

I'd further ask, if necessary, what was the nature of the HSA
distribution? For example, withdrawal of excess contribution?

Your state may have different rules for HSA's.

-Mark Bole

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George wrote:
- quote -

HSA with the rules for what is a tax-free distribution. You were
an eligible individual all year.

For purposes of distributions, there are no tax issues as long as
you use a distribution to pay for or get reimbursed for qualified
medical expenses for either yourself, your spouse and your
dependents. See the instructions for Line 15 of the 8889.

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I have an HSA. This year, my wife was under my insurance for the first
6 months, and then got separate coverage through her job. She has
(qualified) out-of-pocket expenses during both periods.

- Can I use an HSA distribution to pay for her expenses during the time
she was on my insurance? (I think pub 969 says no, because she would
not be "an eligible individual during the testing period." This seems
odd to me, so I suspect I'm misunderstanding it.)

- If that (above) IS allowed, can we do so for the time when she was not
on my insurance? (I think, no.)

- Are there other issues with this?

- I'm reading pub 969, and the form 8889 instructions, and find them
unclear on these issues. Is there a better reference?

Thanks,
George

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >