Can I Use My HSA for My Girlfriend’s Pregnancy?

Whether you can use your Health Savings Account (HSA) for your girlfriend’s pregnancy expenses depends entirely on her status as a tax dependent under Internal Revenue Service (IRS) rules. The determining factor is not her coverage on your health plan, but whether she meets the criteria to be claimed on your tax return for that year.

Determining Tax Dependent Status for a Girlfriend

For a girlfriend to be a tax dependent, she must meet all IRS requirements for a “Qualifying Relative” in the same calendar year. Failing even one test means her medical expenses cannot be paid with your HSA funds.

First, she cannot be your qualifying child or the qualifying child of another taxpayer. Her gross income for the tax year must also be less than the amount set by the IRS, which is $5,050 for 2024. This figure includes all non-tax-exempt income.

The next requirement is the support test, where you must provide more than half of her total financial support for the year. Support includes funds spent on necessities like housing, groceries, utilities, and other living costs.

Finally, the member of household test requires that she live with you for the entire year. If your relationship began mid-year or you did not live together for all twelve months, this test is not met.

Using HSA Funds for a Qualifying Dependent’s Pregnancy

If your girlfriend meets all IRS tests to be your qualifying relative, her pregnancy-related costs become qualified medical expenses. You can use your HSA funds to pay for them tax-free, meaning you will not owe income tax or penalties on the withdrawal.

Covered expenses include prenatal care, medications, lab work, ultrasounds, and hospital services for labor and delivery. Postnatal care for the mother is also a qualified expense.

You must maintain records of these payments, such as receipts and explanations of benefits. This documentation is necessary to prove the funds were used for qualified medical expenses for a tax dependent if the IRS questions the distributions.

Consequences of Use for a Non-Dependent

Using your HSA for your girlfriend’s pregnancy expenses when she is not a tax dependent results in a non-qualified distribution. This payment negates the tax advantages of the HSA for that withdrawal and triggers penalties.

The withdrawn amount is added to your gross income for the year, making it subject to federal income tax. The IRS also imposes an additional 20% tax penalty on the distribution.

For example, using $5,000 from an HSA for non-qualified expenses while in the 22% federal tax bracket would result in financial consequences. You would owe $1,100 in income tax and a $1,000 penalty, for a total of $2,100.

Covering the Child’s Medical Expenses

A distinction exists between the mother’s and the child’s medical expenses. Even if your girlfriend does not qualify as your tax dependent, your biological child will likely be your “Qualifying Child” under IRS rules once born. This makes the child your tax dependent, allowing you to use your HSA for their qualified medical expenses.

This means that while you cannot use your HSA for the mother’s portion of the hospital bill, you can use it for the baby’s portion. Hospitals issue separate bills for the mother’s care and the newborn’s care, and costs directly associated with the child are eligible for payment from your HSA.

After birth, all of the child’s subsequent medical costs, including wellness visits, vaccinations, and treatments for illness, are qualified medical expenses. You can continue to use your HSA for their healthcare as long as you claim the child as a dependent.