HSA question
I've had an HSA since Feb '22. I'm over 55 and been making the maximum contribution. I've had no medical issues in this time and not spent any of the funds. I didn't realize I was supposed to leave unspent funds in the HSA account so at the end of each year I moved the accumulated funds to my general savings. Do you think I still received my tax credit for my yearly HSA savings? Is there a way to restore the 15k back into my HSA account for interest, investment, and other purposes?
Quick Answer:
No, you likely did not receive the tax credit for your HSA contributions. HSA contributions are tax deductible, not a tax credit. The tax advantage comes from pre-tax contributions and tax-free growth and withdrawals for qualified medical expenses. Transferring the funds out negates this benefit. The IRS considers these transfers as distributions, which are taxable unless used for qualified medical expenses.
You cannot simply restore the $15,000 to your HSA. Contributions have annual limits. To correct this, you would need to consult with a tax professional about potential penalties and back taxes owed. They can help determine if amending your tax returns is possible and the best course of action.
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
