A distribution from either your Traditional or Roth IRA to your HSA in a direct trustee-to-trustee transfer is called an HSA funding distribution. These funds are not being distributed from your HSA, but rather are being distributed from your IRA and contributed to your HSA.
- The distribution reduces the amount that can be contributed to your HSA by you and from other
sources (including employer contributions).
- The qualified HSA funding distribution is not included in your income, it is not deductible.
- You can make only one qualified HSA funding distribution during your lifetime. See the 8889 instructions for exceptions and more information.