Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Health Savings Accounts (HSA)

Introduction

Optional Health Savings Accounts (HSA) 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
  • Reporting HSA activity on Form 8889, Health Savings Accounts
  • Determining the HSA deduction on Form 1040

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  • Excess contributions to an HSA that are not withdrawn in a timely fashion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
  • 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
  • Archer Medical Saving Accounts
  • Medicare Advantage MSA
  • Health Reimbursement Arrangement

For more information, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.

Publication 969

Publication 969