Can I use my HSA for a family member?

Yes, distributions from HSAs for qualified medical expenses of the HSA owner, his or her spouse, or dependents are exempt from federal income tax and penalties. These are considered qualified distributions. Non-qualified distributions are distributions that are not used for qualified medical expenses are includable in the individual’s gross income. In addition, non-qualified distributions are subject to a 20 percent additional penalty tax, unless the distribution is made after the HSA owner’s death, disability, or attainment of age 65.

Note: HSA owners are responsible for making the determination as to whether an HSA distribution is qualified or non-qualified. The HSA owner should maintain records of his or her medical expenses sufficient to show that the distributions have been made exclusively to pay for qualified medical expenses, and are, therefore, excludable from gross income. HSA trustees or custodians, as well as employers who make contributions to an employee’s HSA, are not responsible for determining whether distributions are qualified or non-qualified.