Why is my tax return showing a 10% penalty for my Health Savings Account (HSA) distribution?
HSA penalties occur when you don't use your entire HSA distribution amount on medical expenses.
Make sure that on the HSA screen where you entered your HSA distribution, you also enter the amount of medical expenses you used the distribution for.
If you enter medical expenses that are greater than (or equal to) your distribution amount, then you won't have a penalty or taxable income from the HSA distribution.
Make sure that on the HSA screen where you entered your HSA distribution, you also enter the amount of medical expenses you used the distribution for.
If you enter medical expenses that are greater than (or equal to) your distribution amount, then you won't have a penalty or taxable income from the HSA distribution.
