HSA & FSA Questions, Answered
Straight answers checked against the IRS HSA/FSA rules: Pub. 969, Pub. 502 and the CARES Act. Search, or filter by topic. Every answer links to the full guide or ruling if you want the detail.
HSA & FSA Basics
What is the difference between an HSA and an FSA?
An HSA belongs to you, rolls over every year with no "use it or lose it" deadline, can be invested, and follows you between jobs. An FSA is owned by your employer, is mostly use-it-or-lose-it at year end, and stays behind if you leave.
Who is allowed to open an HSA?
Anyone enrolled in a qualifying high-deductible health plan (HDHP) who has no other disqualifying coverage. For 2026 the plan needs a minimum deductible of $1,700 for self-only coverage or $3,400 for family coverage. Your preference does not matter; your health plan does.
Can I have an HSA and an FSA at the same time?
Generally no. A standard health FSA counts as other coverage and blocks HSA contributions. The exception is a limited-purpose FSA that covers only dental and vision, which some employers pair with an HSA for exactly this reason.
Can a self-employed person open an HSA?
Yes. Eligibility only requires enrollment in a qualifying HDHP; no employer is involved. You contribute directly and claim the deduction on Schedule 1 of Form 1040. It lowers income tax, but not the 15.3% self-employment tax.
Contribution Limits
What are the 2026 HSA contribution limits?
$4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up contribution if you are 55 or older. The 2026 health FSA limit is $3,400.
Do my employer's HSA contributions count toward my limit?
Yes. Employer money counts against the same annual limit as your own contributions; it is not extra room on top. Subtract what your employer puts in from your limit to see how much you can add yourself.
What happens if I contribute more than the limit?
The excess is hit with a 6% excise tax for every year it stays in the account. Withdraw the excess, plus any earnings on it, before your tax filing deadline for that year and the penalty does not apply.
Is the family HSA limit per person or per household?
Per household. The $8,750 family limit is one shared number that spouses can split between their HSAs in any proportion. Each spouse's $1,000 catch-up, though, must go into that spouse's own account.
Eligible Expenses
How do I know if something is HSA or FSA eligible?
Search it in our Eligibility Lookup. Every ruling (eligible, not eligible, or needs a Letter of Medical Necessity) is checked against the IRS rules for HSAs and FSAs (Pub. 969), the medical-care definition in Pub. 502, and later changes such as the CARES Act, with each source shown on the page.
Do I need a prescription for over-the-counter medicine?
No. Since January 1, 2020, the CARES Act lets you pay for OTC drugs such as pain relievers and allergy medicine from an HSA, FSA or HRA without a prescription or a Letter of Medical Necessity. That change applies to the accounts only: under Pub. 502, non-prescribed drugs other than insulin still can't be claimed as an itemized medical deduction.
Is sunscreen HSA eligible?
Yes. Broad-spectrum sunscreen with SPF 15 or higher is eligible as skin cancer prevention.
Can I use my HSA for a gym membership?
Only with a Letter of Medical Necessity tying it to a diagnosed condition, such as obesity, type 2 diabetes or hypertension, where a physician has prescribed structured exercise. General fitness alone does not qualify, and approval is still uncommon.
Is massage therapy HSA eligible?
Only when a provider documents it as treatment for a specific diagnosed condition through a Letter of Medical Necessity. Relaxation massage does not qualify.
Are toothbrushes or regular sunglasses eligible?
No. General hygiene items and sunglasses without a corrective lens are treated as personal items. Prescription sunglasses are eligible, and an electric toothbrush prescribed for a specific periodontal condition can be an exception.
Letters of Medical Necessity
What is a Letter of Medical Necessity (LMN)?
A letter from a licensed provider that documents a diagnosed condition, how a specific item or service treats it, and usually how long it is needed. It is what turns some "dual-use" items into eligible expenses.
Does an LMN guarantee my claim is approved?
No. Your HSA or FSA administrator makes the final call. An LMN supports a claim but does not guarantee it.
Can I give my doctor wording to put in the letter?
No. A valid LMN reflects the provider's own clinical judgment. Pre-written justification language reverses that process and will not hold up if the item is not a real treatment for your condition.
Reimbursement & Records
Is there a deadline to reimburse myself from my HSA?
No. As long as the expense happened after your HSA was opened, you can reimburse yourself years later. Many people pay out of pocket now and let the HSA keep growing.
Can I claim old FSA expenses the same way?
No. FSA claims are tied to the plan year plus a short run-out period, commonly 90 days. Expenses from earlier plan years cannot be claimed.
What records should I keep for HSA reimbursements?
An itemized receipt showing the date, provider and purchase; proof it was not reimbursed anywhere else; and confirmation the expense came on or after the date your HSA was established.
State Taxes
Which states tax HSA contributions?
Only California and New Jersey. Both tax HSA contributions and the investment growth inside the account. Every other state either follows the federal treatment or has no state income tax.
Does New York tax HSAs?
New York State does not. New York City does, for payroll contributions: it requires Section 125 contributions, including payroll HSA contributions, to be added back for city tax. That split is why sources seem to disagree.
Should I skip an HSA if I live in California or New Jersey?
Usually not. The full federal tax advantage still applies. The state tax is a real cost to know about, not a reason to pass on the account.
My employer added my HSA contribution back into my Pennsylvania wages. Is that right?
Generally no. HSA contributions reported with code W in box 12 of your W-2 are not taxable in Pennsylvania and should not be added back to state wages in box 16. It is a common payroll error.
Age 65 & Medicare
Can I keep contributing to my HSA after I enroll in Medicare?
No. Enrolling in any part of Medicare ends your eligibility to contribute, even if you are still working. You can keep using the money you already have.
Why should I stop contributing before applying for Medicare?
Medicare Part A can apply retroactively for up to 6 months. Contributions made in that window become excess contributions with a 6% excise tax, so it is safest to stop about 6 months before you apply.
What changes about HSA withdrawals after 65?
The 20% penalty on non-medical withdrawals goes away. Those withdrawals are taxed as ordinary income, much like a traditional IRA, while qualified medical withdrawals stay tax-free at any age.
About HSAMaxGuide
Where do your eligibility rulings come from?
From three layers of primary sources. The HSA/FSA account rules (IRC §223 and IRS Publication 969) decide what an account can pay for. The medical-care definition they point to (IRC §213(d) and Publication 502) decides what counts as medical care. Later changes and guidance, such as the CARES Act and IRS announcements, come third. Each ruling page lists the layers it relies on.
Is this tax advice?
No. HSAMaxGuide is educational content and is not affiliated with the IRS. For decisions about your own account, confirm specifics with your plan administrator or a tax professional.
How does HSAMaxGuide make money?
Through affiliate links to retailers, HSA/FSA account providers and telehealth services, and through Google AdSense ads. None of these ever changes a ruling: every status is set from the IRS sources first.
Do I need an account to use the site?
No. There is no login and no email gate. Every ruling, guide and calculator is free to use.