Optional Health Savings Accounts (HSAs) Course

This course was developed to help volunteers assist taxpayers who have an HSA. There are aspects of HSAs that are complex and will remain out of scope.

Overview of Course

HSAs allow individuals with high-deductible health insurance to use tax-deductible contributions to pay qualified medical expenses. The course covers HSA eligibility, contributions, and distributions. In addition, it covers reporting HSA activity on Form 8889, Health Savings Accounts.

Some aspects of HSAs are out of scope—refer taxpayers with these issues to a professional tax preparer:

• Excess contributions to an HSA that are not withdrawn in a timely fashion
• Qualified HSA funding distributions from an IRA
• Qualified HSA distributions from a health Flexible Spending Arrangement (FSA) or a Health Reimbursement Arrangement (HRA)
• Death of an HSA holder
• Form 8889, Part III, Income and Additional Tax for Failure to Maintain HDHP Coverage
• Deemed distributions from an HSA due to prohibited transactions, such as using an HSA as a security for a loan

For more information, see Publication 969.