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
Form 8889 is used to report Health Savings Account (HSA) contributions, distributions, and any additional tax liabilities if the taxpayer is no longer eligible. This form also calculates the allowable HSA deduction for the tax year.
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.