Tax Facts

8825 / What is a health savings account (HSA) and how is it taxed?

A health savings account (HSA) is a trust created exclusively for the purpose of paying the qualified medical expenses of an account beneficiary.1

An HSA must be created by a written governing instrument that states:

(1)  except in the case of certain rollover contributions, no contribution will be accepted:

a. unless it is in cash; and

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