A hypothetical individual living in the USA held a high deductible healthcare plan (HDHP) in 2017, 2018, and in 2019.

She maxed out her HSA contributions in 2017 and 2018 but did not make any contributions in 2019. Neither did she have any needs to use HSA to cover her medical expenses in 2019 or previous years.

She kept a thorough record of all her medical expenses she paid out of pocket for all years she was enrolled in HDHP and amassed enough receipts to cover $3500 2019 HSA contribution limit.

She didn't need to tap into her HSA to cover her medical expenses and instead she decided to let the funds grow in the HSA for years

She devised the following plan to reduce her 2019 tax burden:

  • at the end of 2019 she will withdraw $3500 from HSA since she has valid medical expenses that she paid in the previous years without using HSA while on HDHP

  • a day the withdrawal hits her checking account she will deposit back the same amount of $3500 since she doesn't need extra funds to cover her past medical expenses.

Can she claim that she maxed out her HSA contribution for 2019 which will reduce her income tax burden for 2019?

  • Just wanted to add that unless you're out of money to contribute, you can continue maintaining records of all medical expenses and not withdraw anything, all the way to retirement. There's no time limit on when to ask for reimbursement, so you can effectively use it for retirement savings. In some ways it's better than an IRA.
    – Earth
    Commented Apr 29, 2019 at 22:45

1 Answer 1


If you can document the medical expenses, and you make sure you haven't submitted them before, and you are careful that you don't submit them again in the future the plan you propose will work. One important warning is to make sure that you don't wait until late December to do this, or you risk running out of time.

Why this works, you already spent your money on these bills. Your withdraw is just you claiming expenses you are entitled to. The new money can come from anywhere.

Keep in mind that the paperwork to prove the expenses is more detailed when you are reimbursing yourself as opposed to paying your provider. The HSA custodian for my account has required me to provide EOB's for expenses submitted this way to make sure that that the funds I am requesting aren't also being reimbursed by the insurance company. Your custodian may not require this.

If you can make the contribution through your paycheck you can also reduce how much social security tax you pay.

  • Thanks for validating this strategy. One more clarification though. May a person elect not to go through medical insurance but pay provider out of pocket? For example fluoride treatments are never covered for adults by insurance companies. Knowing that dental offices never submit such expenses to insurance companies. Same apply to various consultations prior to procedures.
    – AstroSharp
    Commented Apr 29, 2019 at 22:04
  • @AstroSharp It doesn't matter how you pay, just keep all the receipts. We don't have vision/dental insurance anyway so that is what we must do. Anything in Pub 502 should be covered.
    – topshot
    Commented Apr 30, 2019 at 14:32
  • 1
    Waiting until December shouldn't be an issue. You can make HSA contributions for the previous year up until April 15 of the next year. Of course, you'll have to do it before you file your taxes though if you want to deduct it.
    – TTT
    Commented Apr 30, 2019 at 14:41

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