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

Health Savings Accounts (HSA)

Reporting HSA Contributions, Distributions, and Deductions

Unreimbursed Medical Expenses

If unreimbursed qualified medical expenses were paid with the distribution, the taxpayer does not pay tax on the distribution, but it is reported on Form 8889, Part II; the unreimbursed qualified medical expenses are also reported. If the taxpayer does not use the distribution for qualified medical expenses, it must be included in income and the taxpayer must pay income tax on the distribution.

HSA distributions included in income are subject to an additional 20% tax unless the account beneficiary:

  • Dies
  • Becomes disabled (see Form 8889 Instructions)
  • Turns age 65
Form 8889, Part II, 14a and line 15.