Instructions For Form 8889 - Health Savings Accounts - 2010


Department of the Treasury
Internal Revenue Service
Instructions for Form 8889
Health Savings Accounts (HSAs)
be claimed as a dependent on another
is includible in gross income and is
Section references are to the Internal
person’s tax return. You must be, or be
subject to an additional 10% tax unless
Revenue Code unless otherwise noted.
considered, an eligible individual on the
an exception applies.
General Instructions
first day of a month to take an HSA
deduction for that month (see
Qualified Medical Expenses
Purpose of Form
Last-month rule next).
Generally, qualified medical expenses
Use Form 8889 to:
for HSA purposes are unreimbursed
Last-month rule. If you are an eligible
medical expenses that could otherwise
individual on the first day of the last
Report health savings account (HSA)
be deducted on Schedule A (Form
month of your tax year (December 1 for
contributions (including those made on
1040). See the Instructions for
most taxpayers), you are considered to
your behalf and employer
Schedule A and Pub. 502, Medical and
be an eligible individual for the entire
Dental Expenses (Including the Health
Figure your HSA deduction,
Coverage Tax Credit). However, even
Report distributions from HSAs, and
though non-prescription medicines
Testing period. You must remain
Figure amounts you must include in
(other than insulin) do not qualify for the
an eligible individual during the testing
income and additional tax you may owe
medical and dental expenses
period. The testing period begins with
if you fail to be an eligible individual.
deduction, they do qualify as expenses
the last month of your tax year and
for HSA purposes. Expenses incurred
ends on the last day of the 12th month
before you establish your HSA are not
Additional information. See Pub.
following that month (for example,
qualified medical expenses. If, under
969, Health Savings Accounts and
December 1, 2010 – December 31,
the last-month rule, you are considered
Other Tax-Favored Health Plans, for
2011). If you fail to remain an eligible
to be an eligible individual for the entire
more details on HSAs.
individual during this period, other than
year for determining the contribution
because of death or becoming
Who Must File
amount, only those expenses incurred
disabled, you will have to include in
after you actually establish your HSA
You must file Form 8889 if any of the
income the total contributions made
are qualified medical expenses.
following applies.
that would not have been made except
You (or someone on your behalf,
for the last-month rule. You include this
Note. For tax years beginning after
including your employer) made
amount in income in the year in which
December 31, 2010, non-prescription
contributions for 2010 to your HSA.
you fail to be an eligible individual. This
medicines (other than insulin) will not
You received HSA distributions in
amount is also subject to a 10%
qualify as an expense for HSA
additional tax. (See Part III.)
You must include certain amounts in
income because you failed to be an
Account Beneficiary
eligible individual during the testing
You cannot treat insurance
The account beneficiary is the
premiums as qualified medical
individual on whose behalf the HSA
You acquired an interest in an HSA
expenses unless the premiums are for:
was established.
because of the death of the account
1. Long-term care (LTC) insurance,
beneficiary. See Death of Account
2. Health care continuation
Beneficiary on page 2.
coverage (such as coverage under
Generally, an HSA is a health savings
If you (or your spouse, if filing
account set up exclusively for paying
3. Health care coverage while
jointly) received HSA
the qualified medical expenses of the
receiving unemployment compensation
distributions in 2010, you must
account beneficiary or the account
under federal or state law, or
file Form 8889 with a Form 1040 even if
beneficiary’s spouse or dependents.
4. Medicare and other health care
you have no taxable income or any
coverage if you were 65 or older (other
other reason for filing Form 1040.
Distributions From an HSA
than premiums for a Medicare
supplemental policy, such as Medigap).
Distributions from an HSA used
exclusively to pay qualified medical
expenses of the account beneficiary,
Coverage under (2) and (3) can
spouse, or dependents are excludable
Eligible Individual
be for your spouse or a
from gross income. (See the line 15
dependent meeting the
To be eligible to have contributions
instructions for information on medical
requirement. For (4), if you, the account
made to your HSA, you must be
expenses of dependents not claimed
beneficiary, are under age 65, Medicare
covered under a high deductible health
on your return.) You can receive
premiums for your spouse or
plan (HDHP) and have no other health
distributions from an HSA even if you
dependents (who are age 65 or older)
coverage except permitted coverage. If
are not currently eligible to have
generally are not qualified medical
you are an eligible individual, anyone
contributions made to the HSA.
can contribute to your HSA. However,
However, any part of a distribution not
you cannot be enrolled in Medicare or
used to pay qualified medical expenses
Cat. No. 37971Y


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