A special, once-in-a-lifetime option to move money directly from an IRA into an HSA, capped by the same annual HSA contribution limit rather than added on top of it.
How it works
The allowed transfer is whichever is smallest: the amount requested, the remaining HSA contribution limit for the year, or the IRA balance itself.
What this does not include
This computes the maximum allowed transfer amount — it doesn’t verify the other QHFD requirements, including that it must be a direct trustee-to-trustee transfer and that the account holder must remain HDHP-eligible for a 12-month testing period afterward.
How to use this calculator
- Enter the IRA balance, remaining HSA contribution limit for the year, and requested transfer amount.
Frequently asked questions
Why is this called “once-in-a-lifetime”?
The IRS allows only one Qualified HSA Funding Distribution per individual over their entire lifetime, making the decision of when and how much to transfer a significant one-time choice.
What happens if I don’t stay HDHP-eligible for the full testing period?
The transferred amount generally becomes taxable income (and may be subject to an additional 10% penalty) if the testing period requirement isn’t met, with limited exceptions like death or disability.
Can a SEP or SIMPLE IRA be used for a QHFD?
No — only traditional and Roth IRAs are eligible; SEP and SIMPLE IRAs don’t qualify for this specific transfer.