Instructions For Form 8889 - Health Savings Accounts

For information on prescription

value of all assets in the account as

any contributions to your Archer

drug plans, see Pub. 969.

of January 1, 2006, on line 12a.

MSAs (line 4) and any employer

•

You used any portion of any of

contributions (line 9). If you were age

Disabled

your HSAs as security for a loan at

55 or older at the end of 2006, you

An individual generally is considered

any time in 2006. You must include

can increase the contribution limit to

disabled if he or she is unable to

the fair market value of the assets

your HSA by up to $700 (line 3 or line

engage in any substantial gainful

used as security for the loan as

7 depending on your type of coverage

activity due to a physical or mental

income on line 21 of Form 1040 or

and marital status).

impairment which can be expected to

Form 1040NR.

You can make deductible

result in death or to continue

Any deemed distribution will not be

contributions to your HSA even if your

indefinitely.

treated as used to pay qualified

employer made contributions.

Death of Account Beneficiary

medical expenses. Generally, these

However, if you (or someone on your

distributions are subject to the

behalf) made contributions in addition

If the account beneficiary’s surviving

additional 10% tax.

to any employer contributions, you

spouse is the designated beneficiary,

may have to pay an additional tax.

the HSA is treated as if the surviving

Rollovers

See Excess Contributions You Make

spouse were the account beneficiary.

A rollover is a tax-free distribution

on page 4.

The surviving spouse completes

(withdrawal) of assets from one HSA

Form 8889 as though the HSA

You cannot deduct any

or Archer MSA that is reinvested in

belonged to him or her.

contributions you made after you

another HSA. Generally, you must

If the designated beneficiary is not

were enrolled in Medicare. Also, you

complete the rollover within 60 days

the account beneficiary’s surviving

cannot deduct contributions if you can

after you received the distribution.

spouse, or there is no designated

be claimed as a dependent on

You can make only one rollover

beneficiary, the account ceases to be

someone else’s 2006 tax return.

contribution to an HSA during a

an HSA as of the date of death. The

1-year period. See Pub. 590,

How To Complete Part I

beneficiary completes Form 8889 as

Individual Retirement Arrangements

follows.

Complete lines 1 through 11 as

(IRAs), for more details and additional

•

Enter “Death of HSA account

instructed on the form. However, if

requirements regarding rollovers.

beneficiary” across the top of Form

you, and your spouse if filing jointly,

Note. If you instruct the trustee of

8889.

are both eligible individuals and either

•

your HSA to transfer funds directly to

Enter the name(s) shown on your

of you have an HDHP with family

the trustee of another HSA, the

coverage, complete a separate Form

tax return and your SSN in the

transfer is not considered a rollover.

spaces provided at the top of the form

8889 for each spouse as follows.

•

There is no limit on the number of

and skip Part I.

If either spouse has an HDHP with

•

these transfers. Do not include the

On line 12a, enter the fair market

family coverage, you both are treated

amount transferred in income, deduct

value of the HSA as of the date of

as having only the family coverage

it as a contribution, or include it as a

death.

plan. Disregard any plans with

•

distribution on line 12a.

On line 13, for a beneficiary other

self-only coverage.

•

than the estate, enter qualified

If both spouses have HDHPs with

medical expenses incurred by the

family coverage, you both are treated

Specific Instructions

as having only the family coverage

account beneficiary before the date of

death that you paid within 1 year after

plan with the lowest annual

Name and social security number

the date of death.

deductible.

•

(SSN). Enter your name(s) as shown

Complete the rest of Part II.

Combine the amounts on line 11 of

on your tax return and the SSN of the

If the account beneficiary’s estate

both Forms 8889 and enter this

HSA beneficiary. If married filing

is the beneficiary, the value of the

amount on Form 1040, line 25. Be

jointly and both you and your spouse

HSA as of the date of death is

sure to attach both Forms 8889 to

have HSAs, complete a separate

included on the account beneficiary’s

your tax return.

Form 8889 for each of you.

final income tax return. Complete

Line 1

Form 8889 as described above,

Part I—HSA

except you should complete Part I, if

If you were covered by a self-only

Contributions and

applicable.

HDHP and a family HDHP at different

times during the year, check the box

The distribution is not subject to

Deductions

for the plan that was in effect for a

the additional 10% tax. Report any

Use Part I to figure:

longer period. If you were covered by

earnings on the account after the

•

Your HSA deduction,

both a self-only HDHP and a family

date of death as income on your tax

•

Any excess contributions you made

HDHP at the same time, you are

return.

(or those made on your behalf), and

treated as having family coverage

•

Deemed Distributions From

Any excess contributions made by

during that period.

HSAs

an employer (see Excess Employer

Line 2

Contributions beginning on page 4).

The following situations result in

deemed distributions from your HSA.

Do not include employer contributions

Figuring Your HSA

•

You engaged in any transaction

or amounts rolled over from another

Deduction

prohibited by section 4975 with

HSA or Archer MSA. Contributions to

respect to any of your HSAs, at any

The amount you can deduct for HSA

an employee’s account through a

time in 2006. Your account ceases to

contributions is limited by the

cafeteria plan are treated as

be an HSA as of January 1, 2006,

applicable portion of the HDHP’s

employer contributions. See

and you must include the fair market

annual deductible (line 3) reduced by

Rollovers on this page.

-2-

Instructions For Form 8889 - Health Savings Accounts - 2006 Page 2

Related Articles

Related forms

Related Categories