The account holder should keep records of all HSA documentation for as long as their tax return is considered open and subject to an audit (typically three years), or as long as they maintain the HSA account, whichever is longer.
These records include any insurance carrier’s Explanation of Benefits (EOB) statement that documents the expenses for services covered under the High-Deductible Health Plan. The account holder should also keep receipts for items or services paid for with the HSA, for example, vision and dental services.
The IRS indicates that, in case of an audit, the account holder should keep records sufficient to show the following:
- The distributions were exclusively to pay or reimburse qualified medical expenses,
- The qualified medical expenses had not been previously paid or reimbursed from another source, and
The medical expenses had not been taken as an itemized deduction in any year.1
1. “About Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.” Internal Revenue Service, May 1, 2020. https://www.irs.gov/forms-pubs/about-publication-969.Updated: