Is Hydrogen Peroxide an HSA-Eligible Expense?
Understand Health Savings Account (HSA) eligibility for everyday items. Learn IRS guidelines for qualified medical expenses and manage your healthcare finances.
Health Savings Accounts (HSAs) offer a tax-advantaged method for individuals to save and pay for qualified medical expenses. This article explores whether common household items like hydrogen peroxide qualify for HSA reimbursement.
Understanding Health Savings Accounts
An HSA is a personal savings account for healthcare expenses. It provides a unique “triple-tax advantage” where contributions are tax-deductible or made pre-tax, earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free. To establish and contribute to an HSA, an individual must be enrolled in a high-deductible health plan (HDHP).
For 2025, an HDHP is defined as a health plan with a minimum annual deductible of $1,650 for self-only coverage or $3,300 for family coverage. The plan’s out-of-pocket maximums, including deductibles, cannot exceed $8,300 for self-only coverage or $16,600 for family coverage. Individuals must also not be covered by other health insurance that is not an HDHP, be enrolled in Medicare, or be claimed as a dependent on someone else’s tax return.
Determining HSA Eligible Expenses
The IRS defines “qualified medical expenses” for HSA purposes, outlined in Internal Revenue Code Section 213(d). Generally, these are amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. The expense must primarily alleviate a physical or mental defect or illness.
Prior to 2020, over-the-counter (OTC) medications generally required a prescription to be eligible for reimbursement. However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act eliminated this prescription requirement for OTC medicines. This change expanded the range of items that can be paid for with HSA funds without needing a doctor’s note.
Hydrogen Peroxide Eligibility
Hydrogen peroxide is an eligible HSA expense due to its common medical applications as an antiseptic and disinfectant. It is frequently used for cleaning minor cuts, scrapes, and burns to reduce the risk of infection.
Beyond wound care, hydrogen peroxide is also used as a mouth rinse to treat canker sores or gum irritation. Some medical uses include assisting with earwax removal. These applications align with the IRS definition of medical care, which encompasses items used for the treatment or prevention of disease or injury.
Managing Your HSA Funds for Reimbursement
When using HSA funds, maintain accurate records of all purchases, including receipts, invoices, and Explanation of Benefits (EOB) statements. These documents are needed to prove distributions were used exclusively for qualified medical expenses.
The IRS requires taxpayers to keep records to demonstrate that medical expenses paid with HSA funds have not been reimbursed from another source or taken as an itemized deduction. If the IRS audits an account, insufficient documentation for a withdrawal can result in the amount being considered taxable income, plus an additional 20% penalty. It is advisable to retain these records for at least as long as your income tax return remains subject to audit, which can be several years.