Home > Tax News & Info > Increased penalties on nonqualified distributions from HSAs and Archer MSAs

Increased penalties on nonqualified distributions from HSAs and Archer MSAs

The 2010 Health Care Act increased the penalty on non-qualified distributions from Health Savings Accounts (HSA’s) from 10% to 20% and on non-qualified distributions from Archer MSA’s from 15% to 20%. The increased penalties are effective for distributions made after December 31, 2010.

If you need or plan to take a distribution from your HSA or MSA and do not have qualified medical expenses to offset the amount we recommend that you take the money before the end of 2010 to avoid the increased penalty.

Non-qualified distributions from HSA or MSA accounts are also taxed as income subject to ordinary income tax rates.

Comments ( 0 )
  1. No comments yet.
Comments are currently closed.
Trackbacks & Pingbacks ( 0 )
  1. No trackbacks yet.
  2. Trackbacks are currently closed.