SIE Exam Practice Question 893

Question: 893

Which of the following will result if a distribution is taken from a health savings account (HSA) by an individual under age 65, and the distribution is not used to pay for qualified medical expenses?

Correct Answer: B

Explanation:

Distributions from a health savings account (HSA) that are not used to pay for qualified medical expenses are subject to ordinary income tax and a 20% penalty. The penalty is waived if the individual is age 65 or older.

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