May a mistaken distribution be repaid without adverse tax consequences or penalty?
The amount of a mistaken distribution is not included in your gross income nor is it subject to the 10% penalty or excise tax on excess contributions if: 1) you receive the distribution as a result of a mistake of fact due to reasonable cause and 2) you repay to your HSA the amount of the mistaken distribution no later than April 15 following the first year you knew or should have known of the mistake. (Please note that your HSA trustee or custodian is not obligated to allow you to repay mistaken distributions to your HSA.).
