Why
The CARES Act removed the prescription requirement for amounts paid after December 31, 2019. The IRS FAQ confirms that over-the-counter drugs can be paid for or reimbursed from an HSA.
That covers drugs used to treat or prevent illness, such as pain relievers, allergy pills, cold and flu medicine, and antacids.
Publication 502 appears to say the opposite, which confuses people. It's about the itemized tax deduction, where non-prescription drugs other than insulin still don't count. HSAs follow a different rule on this point.
What to keep
- An itemized receipt that names the product and shows the date and price. A card slip doesn't show what you bought.
Watch out for
- Over-the-counter purchases from 2011 through 2019 needed a prescription, so leave those out of your shoebox unless you have one.
- Supplements are judged under a separate rule.
If you plan to reimburse yourself later
IRS Notice 2004-50, Q&A 39, sets no deadline, as long as the expense came after your HSA was established and your records show it wasn't paid by another source or deducted on a tax return. See what records the IRS expects and how long to keep them.