Yes. The IRS allows you to make a once in a lifetime transfer from an IRA into an HSA. This transfer is tax-free as long as you are eligible to contribute to an HSA at the time of the transfer. The maximum transfer amount is equal to your annual HSA contribution limit for the year, based on your coverage type (individual or family) and whether you qualify for catch-up contributions. In order to complete an IRA to HSA transfer:
- You must be eligible to contribute to an HSA (enrolled in a qualified high-deductible health plan, with no other disqualifying coverage).
- The amount transferred and any additional HSA contributions for the year cannot exceed your annual contribution maximum2.
- If you become ineligible for an HSA within 12 months of the transfer, the amount may be considered taxable income and subject to penalties.
Consult with a tax professional to determine eligibility, and to discuss the best transfer option for you.
To initiate this transfer:
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Log into your Lively account.
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Select the menu (three horizontal lines), and click on "HSA Transfers".
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Choose "Start a new transfer", and select the option at the bottom of the page for "Initiate a once-in-a-lifetime IRA to HSA transfer".
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Enter in the required details for your transfer and select "Generate transfer form".
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We will email you a copy of your form for your e-signature.
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After signing the form, we will send you a completed copy of your transfer form to submit directly to your IRA provider.
We typically receive the funds within 10-15 business days of your provider sending us a check. You will be notified via email once your funds have been received and deposited into your account.
1: IRC Sec. 408(d)(9)
2: IRC Sec. 223(b)(4)(C)
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