What are the HSA guidelines regarding disbursement from the HSA for domestic partners?

As regulated by IRS tax code, the federal tax rules governing HSAs and domestic partners vary depending on whether the domestic partner is a tax dependent or not. Individuals should consult a tax adviser to determine whether their domestic partner is a tax dependent. If the domestic partner is a tax dependent, HSA disbursements from an individual’s HSA account for their domestic partner’s qualified medical expenses are tax-free.

If the domestic partner is not a tax dependent, HSA disbursements from the individual’s HSA account for their domestic partner’s medical expenses are not allowed. Any withdrawals associated with a domestic partner’s expenses would be included in taxable income and also be subject to the 20 percent excise tax. (The 20 percent penalty doesn’t apply to distributions made after death or disability, or after the accountholder reaches age 65.)