Yes, you can withdraw money from your HSA, but the rules about what you can spend it on are strict

You can withdraw money from your HSA at any time. The catch is that the money must go toward may have access to medical expenses — a specific list defined by the IRS. If you withdraw for something not on that list, you pay income tax on the amount plus a 20% penalty (unless you are 65 or older, in which case you pay only the income tax).

Most HSA providers let you withdraw in three ways: by debit card tied to the account, by check, or by reimbursing yourself after you pay out of pocket. Some providers also let you transfer money to a linked checking account. The method you use does not change the tax rules — only what you spend the money on matters.

The IRS does not require you to spend HSA money in the same year you contribute it. You can let the balance grow for years and withdraw later, which is why some people treat an HSA like a retirement account once their immediate medical bills are paid.

Key Takeaways

  • Withdrawals for may have access to medical expenses (doctor visits, prescriptions, dental work, vision care, medical equipment) are tax-free; withdrawals for anything else trigger income tax plus a 20% penalty.
  • You can withdraw by debit card, check, or reimbursement request, depending on what your HSA provider offers.
  • There is no deadline to spend HSA money — you can leave it in the account for years and withdraw when you need it.
  • After age 65, you can withdraw for any reason without the 20% penalty, though non-medical withdrawals are still taxed as income.
  • Keep receipts for all medical expenses you reimburse yourself from the HSA, because the IRS can ask for proof years later.

What counts as a may have access to medical expense

The IRS maintains a list of may have access to medical expenses. The most common ones are doctor and dentist visits, prescription medications, eyeglasses and contact lenses, hearing aids, and copays or coinsurance on your health insurance. You can also withdraw for medical equipment like crutches, wheelchairs, or blood pressure monitors.

Mental health treatment, physical therapy, and chiropractic care count. Over-the-counter medications like pain relievers and allergy medicine count only if you have a prescription for them (or a letter from your doctor saying you need them). Vitamins and supplements do not count unless a doctor prescribes them to treat a specific condition.

Expenses that do not count include cosmetic procedures, gym memberships, general wellness products, and insurance premiums (with rare exceptions). If you are unsure whether something qualifies, your HSA provider's website usually has a searchable list, or you can call their customer service line.

How to request a withdrawal

The process depends on your HSA provider. Most large providers (Fidelity, Lively, HealthEquity, Optum) let you request a withdrawal through their website or mobile app in minutes. You typically enter the amount, confirm it is for a may have access to expense, and choose how you want the money — debit card, check, or bank transfer.

Some employers offer HSAs through smaller administrators that may require you to mail a form or call to request a withdrawal. Check your HSA paperwork or log into your account to see what methods are available to you.

If you are reimbursing yourself for an expense you already paid out of pocket, keep the receipt. You do not have to submit it when you request the withdrawal, but the IRS can ask for it years later if they audit your account. Some providers ask you to upload a receipt at the time of withdrawal; others do not.

The tax penalty for non-may have access to withdrawals

If you withdraw money for something that is not a may have access to medical expense, you owe income tax on that amount at your regular tax rate, plus a 20% penalty. For example, if you withdraw $500 for a non-may have access to expense and your tax bracket is 22%, you would owe $110 in income tax plus $100 in penalty — $210 total.

The penalty does not apply if you are 65 or older. After 65, you can withdraw for any reason and pay only income tax on the amount, the same as if you were withdrawing from a traditional IRA. This is why some people use an HSA as a retirement savings tool — they contribute while working, leave the money untouched, and after 65 they can spend it on anything.

Your HSA provider does not automatically withhold taxes or penalties when you make a non-may have access to withdrawal. You are responsible for reporting it on your tax return and paying what you owe. If you do not, the IRS will catch it during an audit.

Withdrawals and your HSA balance

Every withdrawal reduces your HSA balance. If you withdraw more than you have in the account, the withdrawal will be denied or only partially processed, depending on your provider. You cannot overdraw an HSA the way you can overdraw a checking account.

Your HSA balance rolls over from year to year — there is no "use it or lose it" rule. Money you do not spend in 2024 stays in the account and earns interest or investment returns (if your provider offers that option) until you withdraw it. This is different from a Flexible Spending Account (FSA), which has a deadline.

If you change jobs or leave your employer, you keep your HSA and can continue to withdraw from it. The account is yours, not your employer's. You may need to transfer it to a new provider or set up a new withdrawal method if your old employer's plan closes, but the money stays with you.

Keeping records for the IRS

The IRS does not require you to submit receipts when you withdraw from an HSA, but you must keep them for your records. If the IRS audits your account, they will ask for proof that the expenses you withdrew for were actually may have access to medical expenses. Receipts, invoices, and explanation of benefits (EOB) statements from your insurance all count as proof.

Keep records for at least three years after the year you made the withdrawal, though the IRS can go back further if they suspect fraud. Digital copies are fine — take photos of receipts or save PDFs of invoices.

If you cannot find a receipt for an old withdrawal, you may still be able to prove the expense with a credit card statement showing a charge to a medical provider, or a letter from the provider confirming the date and amount of the service. The burden is on you to show the money went to a may have access to expense.

Frequently Asked Questions

Can I withdraw money from my HSA to pay my health insurance premium?

Not usually. HSA withdrawals cannot pay regular health insurance premiums. The exception is COBRA continuation coverage (temporary health insurance after you leave a job) and Medicare premiums after age 65. If you are under 65 and on a regular health plan, you must pay premiums from another source.

What happens if I withdraw money and later find out it was not a may have access to expense?

You owe income tax plus the 20% penalty on that amount. You do not have to repay it to the HSA — the penalty is paid to the IRS when you file your tax return. If you discover the mistake before filing, you can amend your return to correct it.

Can I withdraw money from my HSA if I am no longer on a high-deductible health plan?

Yes. Once money is in your HSA, you can withdraw it for may have access to medical expenses even if you switch to a different type of health plan or leave your job. You cannot make new contributions if you are not on a high-deductible plan, but you can always withdraw what is already there.

Do I have to report HSA withdrawals on my tax return?

Only if you made a non-may have access to withdrawal. may have access to withdrawals are tax-free and do not need to be reported. Your HSA provider sends you a Form 1099-SA each year showing total withdrawals; you use this to report any non-may have access to amounts on your return.

Can someone else withdraw money from my HSA?

Only if you give them power of attorney or add them as an authorized user on the account. Your spouse cannot access your HSA without your permission, even if you are married. Check your HSA provider's rules about who can be added to the account.