Tuesday, August 03, 2010

Can You Buy Medicinal Marijuana With Your Health Savings Account?

You know you live in interesting times when someone is left wondering “can I use my Health Savings Account to buy marijuana?” That is exactly the question answered in a Wall Street Journal article, today. But when medical marijuana is legal in several states, and at least one city is taxing it, this is a fair question.

The answer is no. Here’s the reason: Health Savings Accounts allow you to put pre-tax dollars aside to use for medical expenses. Since the dollars are pre-tax, the IRS regulates how the funds are used. Marijuana is still illegal under federal law, thus you cannot use dollars regulated by the IRS to purchase illegal substances. Even with a medical-marijuana card, prescription, doctor’s note etc, you cannot use pre-tax dollars for a controlled substance that is in violation of federal law.

For more information, see IRS Publication 502 Medical and Dental Expenses

Hat Tip to Paul Caron.

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