Instructions For Form 8889 - Health Savings Accounts

Death of Account Beneficiary

Rollovers

You cannot deduct any

contributions you made after you

If the account beneficiary’s surviving

A rollover is a tax-free distribution

were enrolled in Medicare. Also, you

spouse is the designated beneficiary,

(withdrawal) of assets from one HSA

cannot deduct contributions if you can

the HSA is treated as if the surviving

or Archer MSA that is reinvested in

be claimed as a dependent on

spouse were the account beneficiary.

another HSA. Generally, you must

someone else’s 2005 tax return.

The surviving spouse completes

complete the rollover within 60 days

Form 8889 as though the HSA

after you received the distribution.

How To Complete Part I

belonged to him or her.

You can make only one rollover

Complete lines 1 through 11 as

contribution to an HSA during a

If the designated beneficiary is not

instructed on the form. However, if

1-year period. See Pub. 590,

the account beneficiary’s surviving

you, and your spouse if filing jointly,

Individual Retirement Arrangements

spouse, or there is no designated

are both eligible individuals and either

(IRAs), for more details and additional

beneficiary, the account ceases to be

of you have an HDHP with family

requirements regarding rollovers.

an HSA as of the date of death. The

coverage, complete a separate Form

Note. If you instruct the trustee of

beneficiary completes Form 8889 as

8889 for each spouse as follows.

•

your HSA to transfer funds directly to

follows.

If either spouse has an HDHP with

•

the trustee of another HSA, the

Enter “Death of HSA account

family coverage, you both are treated

transfer is not considered a rollover.

beneficiary” across the top of Form

as having only the family coverage

There is no limit on the number of

8889.

plan. Disregard any plans with

•

these transfers. Do not include the

Enter the name(s) shown on your

self-only coverage.

•

amount transferred in income, deduct

tax return and your SSN in the

If both spouses have HDHPs with

it as a contribution, or include it as a

spaces provided at the top of the form

family coverage, you both are treated

distribution on line 12a.

and skip Part I.

as having only the family coverage

•

On line 12a, enter the fair market

plan with the lowest annual

value of the HSA as of the date of

deductible.

death.

Specific Instructions

•

Combine the amounts on line 11 of

On line 13, for a beneficiary other

both Forms 8889 and enter this

than the estate, enter qualified

Name and social security number

amount on Form 1040, line 25. Be

medical expenses incurred by the

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

sure to attach both Forms 8889 to

account beneficiary before the date of

on your tax return and the SSN of the

your tax return.

death that you paid within 1 year after

HSA beneficiary. If married filing

the date of death.

jointly and both you and your spouse

Line 1

•

Complete the rest of Part II.

have HSAs, complete a separate

If you were covered by a self-only

Form 8889 for each of you.

If the account beneficiary’s estate

HDHP and a family HDHP at different

is the beneficiary, the value of the

times during the year, check the box

Part I—HSA

HSA as of the date of death is

for the plan that was in effect for a

included on the account beneficiary’s

Contributions and

longer period. If you were covered by

final income tax return. Complete

both a self-only HDHP and a family

Deductions

Form 8889 as described above,

HDHP at the same time, you are

except you should complete Part I, if

Use Part I to figure:

treated as having family coverage

•

applicable.

Your HSA deduction,

during that period.

•

Any excess contributions you made

The distribution is not subject to

Line 2

(or those made on your behalf), and

the additional 10% tax. Report any

•

Any excess contributions made by

Do not include employer contributions

earnings on the account after the

an employer (see Excess Employer

or amounts rolled over from another

date of death as income on your tax

Contributions on page 4).

HSA or Archer MSA. See Rollovers

return.

on this page.

Figuring Your HSA

Deemed Distributions From

Line 3

HSAs

Deduction

When figuring the amount to enter on

The following situations result in

The amount you can deduct for HSA

line 3, apply the following rules.

deemed distributions from your HSA.

contributions is limited by the

•

You engaged in any transaction

applicable portion of the HDHP’s

1. Use the family coverage

prohibited by section 4975 with

annual deductible (line 3) reduced by

amount if you or your spouse had an

respect to any of your HSAs, at any

any contributions to your Archer

HDHP with family coverage.

time in 2005. Your account ceases to

MSAs (line 4) and any employer

Disregard any plans with self-only

be an HSA as of January 1, 2005,

contributions (line 9). If you were age

coverage.

and you must include the fair market

55 or older at the end of 2005, you

2. If you and your spouse had

value of all assets in the account as

can increase the contribution limit to

more than one HDHP with family

of January 1, 2005, on line 12a.

your HSA by up to $600 (line 3 or line

coverage, use the plan with the

•

You used any portion of any of

7 depending on your type of coverage

lowest annual deductible.

your HSAs as security for a loan at

and marital status).

3. If you had family coverage with

any time in 2005. You must include

both an umbrella deductible and an

You can make deductible

the fair market value of the assets

embedded deductible for each

contributions to your HSA even if your

used as security for the loan as

individual covered by the plan, your

employer made contributions.

income on Form 1040, line 21.

annual deductible is the smaller of

However, if you (or someone on your

the:

Any deemed distribution will not be

behalf) made contributions in addition

treated as used to pay qualified

to any employer contributions, you

a. Umbrella deductible, or

medical expenses. Generally, these

may have to pay an additional tax.

b. Embedded individual deductible

distributions are subject to the

See Excess Contributions You Make

multiplied by the number of family

additional 10% tax.

on page 4.

members covered by the plan.

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Instructions For Form 8889 - Health Savings Accounts - 2005 Page 2

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