Form 8889 is the IRS tax form for Health Savings Accounts (HSAs), used to report contributions, figure deductions, track distributions, and calculate any taxes owed on non-qualified withdrawals, requiring attachment to your Form 1040 if you had HSA activity (contributions or distributions) during the year. It details tax-advantaged savings for medical expenses, including employer contributions (W-2, Code W), individual contributions (Form 5498-SA), and distributions (Form 1099-SA).
Key Functions of Form 8889
- Part III: Excess Contributions/Special Circumstances: Addresses excess contributions or if you failed to be an eligible individual (covered by a High Deductible Health Plan) during a testing period, which can trigger income and extra tax
- Part I: Contributions & Deduction: Reports all contributions (employee, employer, others) and calculates your allowable tax deduction for contributions not made through payroll.
- Part II: Distributions: Reports money taken out of the HSA, determining if it was used for
qualified medical expenses (tax-free) or for other reasons (taxable + potential 10% penalty).
When You Must File
- You, your employer, or someone else made contributions to your HSA.
- Your HSA made a distribution.
- You failed to be an eligible individual with an HDHP during a testing period.
- You inherited an interest in an HSA.
Key Forms & Information Needed
- Form W-2, Box 12 (Code W): Shows employer contributions.
- Form 5498-SA: Reports contributions to your HSA.
- Form 1099-SA: Reports distributions from your HSA.
