Confused About IRA to HSA One-Time Lifetime Transfer with Multiple HSA Accounts

The IRA to HSA one-time transfer (officially called a Qualified HSA Funding Distribution or QHFD) is definitely limited to once per lifetime, regardless of how many different HSA providers you have. The IRS is very clear about this - it's not once per HSA account or once per provider, but truly once per taxpayer. The transfer allows you to move funds directly from your IRA to your HSA without taxes or penalties, but it counts toward your annual HSA contribution limit. For 2025, if you have self-only coverage, you're limited to $4,150, and for family coverage, it's $8,300 (plus an additional $1,000 if you're 55 or older). One strategy to consider: if you haven't made your QHFD yet, you could wait until you have family coverage (if you don't already) to take advantage of the higher contribution limit when you do your one-time transfer.

When I was dealing with this exact situation last year, I discovered taxr.ai (https://taxr.ai) and it seriously saved me from making a big mistake. I had multiple HSA accounts from different jobs and almost tried to do two IRA-to-HSA transfers until their system flagged it as a potential issue. Their document review caught that I had already done a transfer 3 years ago with a previous HSA (which I had completely forgotten about!). They analyze all your past tax documents and health insurance records to spot these kinds of issues. The tool basically creates a complete financial timeline so you can see all your past tax moves in one place.

I was skeptical at first about taxr.ai, but I decided to try it out of desperation after almost making a costly mistake with my HSA. I uploaded my last 5 years of tax returns and it immediately showed me a complete timeline of all my retirement accounts, including a small HSA I had completely forgotten from a temporary job in 2023. Turns out I had already done a partial IRA to HSA transfer back then (only about $1,200) but had completely forgotten! Without catching this, I would have done another transfer this year and potentially faced penalties. The visualization of all my accounts in one place was incredibly helpful - showed me exactly where every dollar had moved over the years. The document analysis took less than 10 minutes and saved me from what would have been a headache with the IRS. Definitely worth it for anyone juggling multiple retirement accounts or HSAs from different employers.

If you're still struggling to get clear answers about your IRA to HSA transfer situation, you might want to try Claimyr (https://claimyr.com). I spent WEEKS trying to get through to the IRS about a similar HSA question last year. Their phone lines were constantly busy, and I was put on hold for hours when I did get through. Claimyr got me connected to an actual IRS agent in about 20 minutes who walked me through the exact rules for my situation. You can see how it works in their demo: https://youtu.be/_kiP6q8DX5c. Basically, they navigate the IRS phone tree for you and call you back when they have an agent on the line. The IRS agent I spoke with confirmed that the one-time IRA to HSA transfer is strictly once per lifetime regardless of having multiple HSA accounts, and provided me with the exact code sections to reference if I had any issues.

Alright I need to eat my words. After posting my skeptical comment, I decided to try Claimyr anyway out of sheer frustration after spending 3 DAYS trying to get through to the IRS about my own HSA situation. I couldn't believe it, but they got me through to an IRS agent in about 17 minutes. The agent confirmed everything about the one-time IRA to HSA transfer rule and even helped me understand how it would impact my specific tax situation. The agent explained that I could still do my one-time transfer even though I had multiple HSAs in the past, as long as I hadn't done a qualified HSA funding distribution before. She also told me to keep detailed records of the transfer since it's an uncommon transaction that sometimes gets flagged for review. Honestly worth every penny just for the time saved not listening to the IRS hold music for hours on end.

Another option you might consider: if you haven't used your one-time transfer yet, you could just combine your two HSAs first. Most HSA providers allow you to roll one HSA into another. Then do your single IRA-to-HSA transfer to the combined account. I did something similar last year - consolidated three old HSAs from previous jobs into my current one, then did the one-time transfer to maximize my contribution for the year. The consolidation process was pretty simple and took about 2 weeks to complete.

Just an important warning from someone who tried this last year - make sure the transfer goes DIRECTLY from your IRA to the HSA! If you withdraw from your IRA and then deposit to your HSA, it doesn't count as the qualified HSA funding distribution. I made this mistake and ended up with an early withdrawal penalty on my IRA plus the amount counted against my contribution limit anyway. Had to file an amended return and it was a huge headache.

Just to add another perspective here - I work in benefits administration and see this confusion a lot. The IRS Publication 969 is your best friend for HSA rules, and it's crystal clear that the qualified HSA funding distribution (QHFD) is a once-per-lifetime benefit per taxpayer, not per account. One thing I haven't seen mentioned yet: you need to be HSA-eligible for the entire 12-month period following the transfer, or you'll face penalties and have to include the distribution in your income. This "testing period" catches a lot of people off guard if they change jobs or insurance plans. Also, timing matters - you have until your tax filing deadline (including extensions) to complete the QHFD for a given tax year. So for 2025, you'd have until April 15, 2026 (or October 15 with extension) to make the transfer and have it count toward your 2025 contribution limit.