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

Health Savings Accounts (HSA)

Reporting HSA Contributions, Distributions, and Deductions

Form 8889, Part I

Form 8889, Part 1, is used to report all HSA contributions and to compute the allowable HSA deduction. This includes contributions made by the filing deadline that are designated for the tax year. Contributions made by an employer are also shown in Part I, but are not included in the deductible amount.

An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of an eligible individual.

Taxpayers should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount contributed to the HSA during the year. Employer contributions are shown on the taxpayer's Form W-2, box 12, code W. Form 5498-SA will be covered in the next part of the lesson.

Code W amounts may include employee contributions made from a Section 125 Cafeteria Plan (with pretax dollars). These amounts get the same tax treatment as employer contributions and are not deductible on Form 8889.

Tax software hint.

The entry of code W and the amount in box 12 of Form W-2 will generate Form 8889 with employer contributions shown. After all other entries have been completed on Part I, the HSA deduction will be carried from Form 8889 to the applicable line in the Adjusted Gross Income section of Form 1040.

Form 8889, Part I and Form 1040, Pg 1 Adjustments Section line 25.