Final answer:
Non-qualified withdrawals from a health savings account are subject to income taxes and a penalty of 20%. A Traditional IRA, while different, also subjects withdrawals to income taxes, but without the additional penalty unless taken before retirement age.
Step-by-step explanation:
Non-qualified withdrawals from a health savings account (HSA) are subject to both income taxes and an additional penalty unless the account holder is over the age of 65 or disabled.
The penalty for non-qualified withdrawals is typically 20% of the amount withdrawn. In comparison, a Traditional IRA is an individual retirement account that allows for tax-deferred growth of investments, but when withdrawals are taken after retirement, the lump sum is subject to income taxes.
It is important to distinguish between these accounts as they serve different purposes and have varying tax implications upon withdrawal.