Health Savings Account Tax Resources and Information
As part of the federal income tax return, HSA participants will need to include IRS Form 8889: Health Savings Account to report HSA contributions (those made by the employee and IU) and any distributions from the Health Savings Account (HSA). This form must be filed with Form 1040 or Form 1040 NR.
Information needed to complete the HSA section of the 2016 tax return:
- 2016 Form W-2 from IU (available on the Employee Center in January)
- Form 1099-SA (Distributions)
- provided online by Nyhart in mid to late January
- Form 5498-SA or a listing of 2016 contributions*
- provided online by Nyhart in May
- Form 8889: Health Savings Account (PDF)
- Instructions for completing Form 8889 (PDF)
- The receipts/records of qualified health expenses (for reference and recordkeeping)**
* The Form 5498-SA (contributions) will not be available until late May 2017. This allows your tax form to include any contributions you may have made in 2017 for the 2016 tax year.
For purposes of Form 8889, you can use the contribution details from your online account statements. This includes all contributions made during calendar year 2016 - IU’s contribution on your behalf, your payroll contributions, any contributions made outside of payroll and any interest/earnings on those funds.
Access the ‘Instructions for Form 8889’ for directions on how to complete your income tax Form 8889.
Participants should keep all receipts and records for qualified health expenses paid with HSA funds for their own records. These do not need to be sent to Nyhart or to the IRS with your tax return.
For additional information on qualified health expenses, refer to IRS Publication 502 “Medical and Dental Expenses” or IRS Publication 969 “Health Savings Accounts and Other Tax-Favored Health Plans” at www.irs.gov.
Common questions about the forms
Q. What information do I put in line 2 of Form 8889?
A. Line 2 is where you record any contributions made to your HSA account outside of payroll contributions. Example: transfer funds from a personal bank account to your HSA.
Q. What information do I put in line 9 of Form 8889?
A. Line 9 is where you record any contributions made to your HSA account via payroll contributions. This information can be found on your W-2, box 12, code W. This figure will include both the amount that IU contributed to your HSA and the amount you contributed to your HSA through payroll deductions.
Q. Where can I find the HSA contribution information?
A. Box 12, Code W. This code, labeled Employer Contributions (used in line 9 of Form 8889) includes both IU’s contribution to your account as well as your own contributions through payroll deductions.
Q. Why do I need a Form 1099-SA?
A. The IRS requires Nyhart to issue Form 1099-SA if you made a distribution from your HSA during 2016. You must report distributions from your HSA on IRS Form 8889. You must file this form with your annual income tax return. You can find your tax statements online at Nyhart's web site.
Q. What is included in Box 1?
A. Box 1 of the 1099-SA reports the total distributions made from your HSA in 2016. Distributions include any purchase or withdrawal using HSA funds. If any excess contributions and associated earnings were distributed, they are also included.
Q. What is the distribution code - Box 3?
A. The distribution code represents the particular type of distribution made from the HSA. The most common distribution code is “1”. This is a normal distribution. A normal distribution means that the funds were withdrawn with the debit card, checks or on-line bill payment. Other codes are for specific types of distributions. These would include a distribution for an excess contribution (2) or a distribution to a beneficiary in the event of a death or disability (3, 4, or 6). A complete list is in the bottom half of your Form 1099-SA.
Q. What is included in Box 2?
A. Box 2 of Form 1099-SA reports any earnings on excess contributions. This box includes any excess contributions you withdrew from your account, as well as any interest or investment earnings that are attributable to the funds that were withdrawn.
Q. What is form 5498-SA?
A. This form includes all funds contributed to your HSA It is available online or by mail in May. It is for informational purposes and supports contributions already reported on your tax return. You should keep this form with your other tax records.
Q. If the 5498-SA isn’t available until May, what do I use to file my taxes?
A. Use your Year-End account statement to complete Form 8889 when filing your Federal tax return (available on the iu.nyhart.com website)
You should keep all receipts and records for qualified health expenses paid with your HSA funds. Keep these for your own records. You should keep receipts and records in case the IRS requests to review them.
- Tax Implications section of the Q&As
- HSA Recordkeeping section of the Q&As
- Nyhart secure HSA website: iu.nyhart.com
- Nyhart Customer Service: 1-800-284-8412 or
- IRS website: www.irs.gov
- IRS help line: 1-800-Tax-1040
For advice about tax matters please consult a personal tax advisor.
The IRS help line is 800-Tax-1040 (1-800-829-1040).