Can I Use My HSA for Fertility Treatments: Limits and Penalties

Yes, you can use an HSA for fertility treatments in most cases. Federal tax law treats procedures performed on you, your spouse, or a dependent to overcome an inability to have children as qualified medical expenses, which means HSA dollars pay for them tax-free. The important exceptions involve third parties: surrogacy costs and donor-related medical care performed on someone other than you generally do not qualify, and using HSA funds for those triggers a 20% penalty on top of income tax.

What Fertility Care Qualifies

IRS Publication 502 states that you can use HSA funds for procedures “performed on yourself, your spouse, or your dependent to overcome an inability to have children.”¹ The underlying authority is Section 213(d) of the Internal Revenue Code, which defines medical care as amounts paid for the diagnosis, treatment, or prevention of disease.²

Eligible expenses include:

In vitro fertilization, including egg retrieval, laboratory fees, embryo transfer, and anesthesia. A single cycle typically costs between $19,000 and $30,000 depending on medications and add-ons like genetic testing.
Intrauterine insemination cycles and the monitoring that goes with them.
Diagnostic testing such as bloodwork, follicle-tracking ultrasounds, semen analysis, and hysterosalpingograms.
Surgical procedures to repair reproductive organs or to reverse a prior tubal ligation or vasectomy, which Publication 502 specifically lists as qualified.¹
Prescription fertility medications, including gonadotropins, progesterone, and estrogen supplements. Medication costs alone run from $1,500 to over $7,000 per cycle.
Temporary storage of eggs or sperm when it is part of a treatment like IVF, which Publication 502 explicitly includes.¹
Acupuncture, which is a qualified medical expense in its own right under Publication 502.¹

Over-the-counter ovulation predictor kits and pregnancy tests also qualify. The CARES Act of 2020 made all OTC health products and medications eligible for HSA reimbursement without a prescription.³

What Doesn’t Qualify

The biggest exclusion catches people off guard: surrogacy. Publication 502 states that you cannot include amounts paid for “the identification, retention, compensation, and medical care of a gestational surrogate” because those expenses are for an unrelated party.¹ Surrogacy arrangements often exceed $100,000, and none of the surrogate’s medical bills, agency fees, or legal contracts qualify for HSA funds.

A 2025 IRS private letter ruling reinforced that position, concluding that egg donor costs, egg retrieval performed on a donor, and other medical procedures related to a surrogate pregnancy are not deductible under Section 213 because they are not performed directly on the taxpayer.⁴ The ruling was specific to surrogacy. If you are using donor eggs or sperm in your own IVF cycle where the procedure is performed on you, the picture is less clear: the IVF itself qualifies, but donor procurement fees involve a third party. This is an area where a tax professional familiar with reproductive medicine can save you from an expensive mistake.

Other ineligible costs:

Long-term embryo storage. Publication 502 covers “temporary” storage as part of a treatment cycle. Annual fees to store frozen embryos indefinitely for possible future use do not fit that description.
Adoption legal and agency fees. These are not medical expenses, though a separate adoption tax credit may apply.
Cosmetic procedures and non-prescribed vitamins or herbal supplements.¹

Travel and Lodging for Treatment

Transportation that is primarily for and essential to medical care is HSA-eligible. For 2026, the standard mileage rate for medical travel is 20.5 cents per mile, and parking and tolls related to appointments also qualify.⁵

If your clinic is far enough away that you need to stay overnight, lodging qualifies up to $50 per night per person. A companion traveling with you for medical reasons can also claim the $50 allowance, so a couple could deduct up to $100 per night.¹ Meals during medical travel are not eligible. Over several weeks of monitoring visits and procedures, these costs add up and are easy to overlook.

How Much You Can Contribute

Fertility care is expensive enough that hitting the annual HSA cap is a real concern. For 2026, the limits are $4,400 for self-only coverage and $8,750 for family coverage. If you are 55 or older, you can add a $1,000 catch-up contribution. These figures reflect the expanded amounts under the One Big Beautiful Bill Act, confirmed by IRS Notice 2026-05.⁶

To contribute at all, you must be enrolled in a qualifying high-deductible health plan. For 2026, that means a minimum annual deductible of $1,700 (self-only) or $3,400 (family), and maximum out-of-pocket costs no higher than $8,500 (self-only) or $17,000 (family).⁷ You also cannot be enrolled in Medicare or claimed as a dependent on someone else’s return.

Even the family limit of $8,750 covers less than half of a typical IVF cycle. Couples planning multiple cycles often max out contributions in the years leading up to treatment, because HSA balances roll over indefinitely and there is no deadline for reimbursing yourself for past expenses as long as the expense occurred after the account was established.⁸

Open the Account Before Treatment Starts

You can only reimburse yourself for expenses incurred after the HSA was established. The IRS is explicit that costs incurred before the account existed are not qualified, regardless of when you take the distribution.⁸ If fertility treatment is in your future, open the HSA before your first appointment, not after.

On the other side of the timeline, there is no deadline to reimburse yourself. You could pay for an IVF cycle out of pocket in 2026 and reimburse yourself from the HSA in 2030, as long as the account existed when the expense was incurred. Some people use this deliberately: pay with a rewards credit card now, let the HSA balance grow through investments, and reimburse years later. The requirement is that you keep the receipts for as long as you wait.

Documentation to Keep

HSA administrators usually do not ask for proof at the time of withdrawal. The IRS can ask years later during an audit, and solid records are the only thing standing between you and a reclassified distribution.

For every fertility-related transaction, keep an itemized receipt showing the date of service, the provider’s name, and a description of the treatment. A credit card statement is not enough because it shows the amount and vendor but not the nature of the service.

A Letter of Medical Necessity from your fertility doctor ties the treatment to a diagnosed condition. It should state your diagnosis, explain why the treatment is medically necessary, and be on the physician’s letterhead. The letter matters most for expenses that sit in gray areas, such as embryo genetic testing or extended medication protocols.

The IRS general rule is to keep tax-supporting records for at least three years after you file the return.⁹ If you delay reimbursing yourself, the three-year clock starts on the return that reports the distribution, not the date of service. Digital copies stored indefinitely cost nothing and remove the guesswork.

The 20% Penalty for Non-Qualified Withdrawals

If you take money out of an HSA for something that is not a qualified medical expense, the distribution is included in your taxable income and hit with an additional 20% tax on top of your regular rate.¹⁰ On a $15,000 withdrawal, the penalty alone is $3,000 before income tax.

The most common way people stumble into the penalty with fertility care is assuming that every line item on a clinic bill is automatically qualified. It is not. If your clinic bundles services like long-term storage fees or surrogate coordination into one invoice, separate the eligible charges from the ineligible ones before you swipe the HSA card. Every HSA distribution has to be reported on Form 8889 with your tax return, which is where qualified and non-qualified amounts get sorted out.¹¹ Getting the split right at the point of payment is far easier than unwinding it later.

1
Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
2
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
3
Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act
4
Internal Revenue Service. PLR 202505002 – Assisted Reproductive Technology Expenses
5
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents
6
Internal Revenue Service. Notice 2026-05 – HSA Guidance Under the One Big Beautiful Bill Act
7
Internal Revenue Service. Rev. Proc. 2025-19 – 2026 HSA/HDHP Inflation Adjusted Amounts
8
Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
9
Internal Revenue Service. How Long Should I Keep Records
10
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
11
Internal Revenue Service. Instructions for Form 8889 (2025)