Returns/Refunds In an HSA

Tanya Dick, Assistant Vice President—Heath Savings Accounts

July 01, 2013

Managing Your Money

Articles

The Union Bank & Trust HSA is simply a checking account that follows the regulations that are issued by the Department of Treasury. Any funds that are deposited into this account are considered a contribution. If you make a debit out of this account and end up having to return all or part of the original purchase, the amount that is credited back into your account is considered a contribution. This amount has now become a non-qualified expense. It is the account owner’s responsibility to contact their HSA Custodian to discuss the options for correcting these transactions.

One option might be to return the entire amount of the original transaction to the HSA. You would contact your HSA Custodian and have them code both transactions as non-reporting. This would ensure that you will not be penalized by the IRS when you file your taxes for a non-qualified expense.

A second option would be to pay for the item from a source other than your HSA, such as your regular checking account or a Visa card. When you have the item home and are sure that you will not be returning it, you would simply pay yourself back out of your HSA. If you have used your Visa, you could pay the bill with our Online Bill Pay service!

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This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.