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

Adjustments to Income Workout

Reporting HSA Contributions, Distributions, and Deductions

Form 8889, Part II

Form 8889, Part II, is used by taxpayers to report distributions from an HSA. Taxpayers receive tax-free distributions from an HSA to pay or be reimbursed for qualified medical expenses. The taxpayer will have to tell you what types of expenses were paid or reimbursed with the distribution.

Distributions from an HSA are reported to the taxpayer on Form 1099-SA, Distributions from an HSA, Archer MSA, or Medicare Advantage MSA. Form 1099-SA, box 5, will indicate whether the distribution is from an HSA, Archer MSA, or a Medicare Advantage MSA. The code in Form 1099-SA, box 3, identifies the distribution the taxpayer received. Code 1 is a normal distribution. Refer to Form 1099-SA for an explanation of the other codes.

If distributions are received for other reasons, the amount withdrawn will be included in income and reported on Form 1040.

This tax is computed on Form 8889 and reported on Form 1040. Taxpayers do not have to take distributions from their HSA each year.

Tax software hint.

Amounts entered on Form 8889 are automatically carried over to the applicable lines of Form 1040. The amount of HSA distributions not used for qualified medical expenses will be included in income.

Form 8889, Part II.