What this line means
The portion of your HSA distributions used to pay qualified medical expenses not covered by insurance. Qualified expenses include doctor visits, prescriptions, dental care, vision care, and certain over-the-counter medications. 1 The expenses must have been incurred after your HSA was established. This amount is not taxable. Subtract it from total distributions to determine how much (if anything) you owe tax on.
Does this apply to you?
- You used HSA funds to pay for medical, dental, or vision expenses during 2025
- You paid for prescription medications or insulin with your HSA
- You used HSA money for over-the-counter drugs or menstrual care products
- You paid qualified medical expenses for your spouse or dependents from your HSA
Easy to overlook
Over-the-counter medications and menstrual care products qualify Since 2020, over-the-counter medications purchased without a prescription are qualified medical expenses. Menstrual care products (tampons, pads, liners, cups) also qualify. Filers who set up their HSA years ago sometimes still follow the old rule that required a prescription for OTC drugs. 2 IRS Publication 502 — Medical and Dental Expenses
Expenses for your spouse and dependents count even if they are not on your HDHP You can use HSA funds to pay qualified medical expenses for your spouse and tax dependents, even if they are covered under a different health plan. The HSA owner does not need to be the one who incurred the expense. Filers sometimes assume HSA money can only cover the account holder’s own expenses. 3 IRS Publication 969 — Qualified medical expenses for HSAs
Watch out for this
Health insurance premiums are generally not a qualified medical expense for HSA purposes. You cannot use HSA funds to pay your monthly health insurance premiums and count them here — with a few exceptions: COBRA continuation coverage, health insurance while receiving unemployment compensation, Medicare premiums (Parts A, B, D, and Medicare Advantage), and long-term care insurance (up to age-based limits). Counting regular insurance premiums as qualified expenses makes those distributions taxable and subject to the 20% additional tax if you are under 65. 4
Footnotes
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IRS Publication 502, Medical and Dental Expenses. https://www.irs.gov/pub/irs-pdf/p502.pdf ↩
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IRS Publication 502, Medical and Dental Expenses, Over-the-Counter Medicines. https://www.irs.gov/pub/irs-pdf/p502.pdf ↩
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IRS Publication 969, Health Savings Accounts, Qualified Medical Expenses. https://www.irs.gov/pub/irs-pdf/p969.pdf ↩
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IRS Publication 969, Health Savings Accounts, Insurance Premiums. https://www.irs.gov/pub/irs-pdf/p969.pdf ↩