What happens if an HSA distribution is made as the result of a factual mistake?

If there is clear and convincing evidence that amounts were distributed from an HSA because of a mistake of fact due to reasonable cause, the accountholder may repay the mistaken distribution no later than April 15 following the first year they knew or should have known the distribution was a mistake. Under these circumstances, the distribution is not included in their gross income or subject to the 20 percent additional tax, and the repayment is not subject to the six percent excise tax for excess contributions. Individuals could use the UMB HSA Contribution form to send with their repayment, indicating “Re-Deposit” on the form.