Who Needs to File Form 8889?
Taxpayers must file Form 8889 if they:
✔️ Contributed to an HSA in the tax year
✔️ Received distributions from an HSA
✔️ Need to report amounts that must be included in income due to ineligibility during the testing period
✔️ Inherited an HSA after the account holder passed away
Steps to Enter Form 8889 in Tax Software
1. Access Form 8889
From the left-side menu, navigate to Adjustments.
Select Health Savings Accounts (HSAs) - Form 8889.
Click Add Form 8889 - Health Savings Account.
2. Select the Taxpayer
Indicate whether the form applies to the Taxpayer or Spouse (for joint filers).
Part I: HSA Contributions and Deductions
Line 1: Type of Coverage
Select Self-only HDHP or Family HDHP based on the taxpayer’s coverage.
If both types applied during the year, choose the one that was in effect the longest.
Line 2: Contributions
Enter HSA contributions made for the tax year, including any made in the following year before the tax filing deadline.
Line 3: Contribution Limits
If under 55, enter:
$3,850 (self-only)
$7,750 (family)
If Form 1099-SA is completed, a worksheet will generate automatically.
Line 4: Archer MSAs
Enter any contributions made to an Archer MSA.
Line 7: Additional Contributions
If the taxpayer is 55 or older, enter any additional catch-up contributions.
Line 9: Employer Contributions
Report employer contributions from Box 12 (Code W) of Form W-2.
Line 10: HSA Funding Distributions
Enter any IRA-to-HSA funding distributions.
Part II: HSA Distributions
Line 14a: Total Distributions
Report all HSA distributions received during the tax year, including debit card transactions and withdrawals.
Line 14b: Rollovers
Include rollovers and withdrawals of excess contributions made before the tax deadline.
Line 15: Qualified Medical Expenses
Enter qualified medical expenses paid using HSA funds that were not reimbursed.
Additional 20% Tax on Non-Qualified Distributions
An additional 20% tax applies to non-qualified HSA distributions, unless the taxpayer:
✔️ Passed away
✔️ Became disabled
✔️ Turned 65
Line 17a and 17b
Check Line 17a if an exception applies.
Enter 20% of taxable distributions on Line 17b.
Part III: Income and Additional Taxes
Line 18: Excess Contributions
Use the Line 3 Limitation Chart and Worksheet to determine any excess contributions.
Line 19: Qualified HSA Funding Distributions
Any amounts generated from Line 10 will automatically populate here.
By following these steps, you can accurately report HSA contributions, distributions, and deductions using Form 8889.