HSA Rollovers & Transfers
What are the rules regarding rollovers and transfers of HSA?
You may withdraw any portion or all of the funds from one HSA or Archer MSA and roll them into an HSA with another custodian or trustee. However, you are required to roll the funds into a new HSA within 60 calendar days of your receipt of the funds. Another rule provides that you are only allowed to make one HSA rollover in a 12-month period. The 12-month period begins on the date you receive the distribution, not on the date you roll it into another HSA. In addition, you may transfer your Archer MSA or HSA funds directly from one HSA custodian or trustee to another without ever having direct control or custody of the funds. HSA rollover and HSA transfer contributions are not deductible and do not count against the annual contribution limits discussed earlier in these HSA Q&As.
What are the rules regarding the rollover of IRA funds into an HSA?
You are allowed a one-time, tax-free trustee-to-trustee transfer of IRA funds into an HSA if certain conditions are satisfied:
- The transfer of funds from the IRA to HSA must be made in a direct Trustee-to-Trustee transfer.
- You must be covered by an HDHP and remain eligible for 12 months after your IRA rollover. If you are not eligible for 12 months after the rollover, the funds transferred will be treated as taxable income and subject to a 10 percent excise tax.
- Only Traditional or Roth IRAs can be rolled over into an HSA.
- The amount of the IRA rollover to the HSA is subject to the maximum annual contribution limits. This means amounts transferred from your IRA, plus your employer contributions, plus your contributions, will all apply against the maximum annual contribution limit. You must ensure that the total of all these do not exceed the maximum annual contribution limits.