Can HSA funds be used for groceries? The definitive 2025 guide

November 27, 2025 •

3 min read

As of 2024, millions of Americans utilized Health Savings Accounts (HSAs), yet confusion persists over their eligible uses. A very common question is, "Can HSA funds be used for groceries?" and the general rule set by the IRS is no, with the key distinction lying in medical necessity versus general wellness.

Quick Summary

Regular groceries are not considered qualified medical expenses and are ineligible for HSA use, as they are deemed ordinary living expenses by the IRS. A rare exception applies to specific medically necessary foods prescribed by a physician to treat a diagnosed medical condition, which requires proper documentation.

Key Points

General Rule: You cannot use HSA funds for regular groceries, as they are considered ordinary living expenses by the IRS.
Rare Exception for Medical Necessity: Specific foods or supplements prescribed by a doctor for a diagnosed medical condition may be eligible with a Letter of Medical Necessity (LMN).
Risk of Penalties: Using HSA funds for non-qualified grocery purchases results in income tax and a 20% penalty if you are under age 65.
Documentation is Key: To prove a food expense is medically necessary, you must retain an LMN, a prescription, and all itemized receipts.
Distinguish Medical Need from General Wellness: Costs for general health or wellness, like healthy food choices, are not eligible. The expense must be directly linked to treating a specific illness.

The General Rule: Why Groceries Are Not HSA-Eligible

Under current IRS guidelines, Health Savings Accounts (HSAs) are designated for qualified medical expenses only, which are defined as the costs for the diagnosis, cure, mitigation, treatment, or prevention of disease. This excludes the cost of food and groceries for general nutritional needs, regardless of how healthy they may be. The rationale is that these are considered ordinary living expenses, not medical treatments.

Consequences of Misusing Your HSA Funds

Attempting to use your HSA card for regular grocery purchases can have significant financial repercussions. If you use HSA funds for non-qualified expenses, the amount spent is subject to regular income tax and, if you are under age 65, an additional 20% penalty tax. This non-qualified distribution must be reported on your tax return. Once you turn 65, the 20% penalty is waived, but income tax on non-qualified distributions still applies.

The Exception: When Prescribed Foods Qualify

In specific, limited circumstances, certain food items can be purchased with HSA funds if they meet strict IRS criteria and are medically necessary to treat a diagnosed illness or condition, and the cost exceeds normal expenditures.

To qualify, you must obtain a Letter of Medical Necessity (LMN) from your healthcare provider. This letter must explicitly state the specific medical condition being treated, how the food item alleviates or treats the illness, and confirm the food does not serve normal nutritional needs. Examples of such foods include gluten-free products for Celiac disease, specialized formulas for metabolic disorders, prescribed nutritional supplements, or weight-loss foods for conditions like obesity or diabetes when part of a prescribed program. Diligent record-keeping, including the prescription, LMN, and itemized receipts, is essential for potential IRS audits.

HSA vs. FSA for Food-Related Expenses

Both HSAs and FSAs are tax-advantaged accounts for healthcare with similar strict rules regarding food expenses. While neither covers general groceries, both can cover medically prescribed food with an LMN. They also both cover OTC medications without a prescription following the CARES Act. A key difference is that unused HSA funds roll over, while FSAs are typically "use it or lose it".


Feature	Health Savings Account (HSA)	Flexible Spending Account (FSA)
General Groceries	No.	No.
Medically Prescribed Food	Yes, with LMN.	Yes, with LMN.
OTC Medications	Yes, without prescription.	Yes, without prescription.
Rollover of Funds	Unused funds roll over.	Generally "use it or lose it".

Alternatives to Using Your HSA for Groceries

Since HSAs are generally not for grocery shopping, consider exploring alternative resources like SNAP, WIC, or local food banks for food assistance.

Conclusion: Navigating the Fine Print of HSA Eligibility

Using HSA funds for general groceries is not permissible, as the IRS considers them personal expenses. Misuse can lead to taxes and penalties. The rare exception for medically necessary prescribed foods requires an LMN and meticulous records. Consult the official IRS website and Publication 502 for precise rules. Understanding these regulations helps maximize HSA benefits for legitimate medical costs while avoiding costly mistakes.

How to Maximize Your HSA for Eligible Medical Expenses

Focus on using your HSA for eligible expenses like medical services, prescription drugs, OTC medications, vision care, dental care, medical equipment, and mental health services.

Here is a list of other eligible expenses where your HSA can be put to good use:

Medical Services
Prescription Drugs
Over-the-Counter (OTC) Medications
Vision Care
Dental Care
Medical Equipment and Supplies
Mental Health Services

The Role of an LMN for Nutrition Expenses

An LMN is crucial for qualifying specific nutritional items, detailing the medical condition and how the prescribed food or supplement helps treat it. Best practices include consulting a healthcare provider for a specific letter, potentially proving excess cost, and maintaining all documentation for audits.

Conclusion: Protect Your Tax-Free Status

Using an HSA for general groceries is not allowed to protect the account's tax-free status for medical purposes. Adhering to strict criteria and maintaining records helps prevent tax penalties and ensures compliance.

Frequently Asked Questions

Yes, you can use your HSA card at a grocery store, but only for eligible over-the-counter medical items, not for regular food purchases. The card's functionality does not determine the eligibility of the purchase.

You need three key pieces of documentation: a Letter of Medical Necessity (LMN) from your healthcare provider, the prescription for the item, and itemized receipts for the specific purchases.

No. The IRS does not permit the use of HSA funds for food simply because it is healthy or organic. The expense must be for the treatment of a specific, diagnosed medical condition.

If you mistakenly use your HSA for groceries, you should contact your HSA administrator immediately to return the funds to your account. This will help you avoid paying taxes and the 20% penalty.

Using HSA funds for meal delivery may be possible if a doctor prescribes the service as part of recovery or treatment for a specific condition. This requires a Letter of Medical Necessity and detailed records.

Weight-loss programs and diet foods can be eligible, but only if a doctor diagnoses a specific medical condition (like obesity or diabetes) that requires weight loss as treatment and you obtain an LMN.

Most nutritional supplements and vitamins are not eligible for general health purposes. They may qualify if a medical professional recommends them specifically to treat a diagnosed medical condition and you have a Letter of Medical Necessity.