Instructions For Form 8889 - Health Savings Accounts

2011

Department of the Treasury

Internal Revenue Service

Instructions for Form 8889

Health Savings Accounts (HSAs)

Definitions

instructions for information on medical

Section references are to the Internal

expenses of dependents not claimed

Revenue Code unless otherwise noted.

on your return.) You can receive

General Instructions

Eligible Individual

distributions from an HSA even if you

are not currently eligible to have

To be eligible to have contributions

contributions made to the HSA.

What’s New

made to your HSA, you must be

However, any part of a distribution not

covered under a high deductible health

The IRS has created a page on

used to pay qualified medical expenses

plan (HDHP) and have no other health

IRS.gov for information about Form

is includible in gross income and is

coverage except permitted coverage. If

8889 and its instructions, at

subject to an additional 20% tax unless

you are an eligible individual, anyone

gov/form8889. Information about any

an exception applies.

can contribute to your HSA. However,

future developments affecting Form

you cannot be enrolled in Medicare or

8889 (such as legislation enacted after

Qualified Medical Expenses

be claimed as a dependent on another

we release it) will be posted on that

person’s tax return. You must be, or be

Generally, qualified medical expenses

page.

considered, an eligible individual on the

for HSA purposes are unreimbursed

first day of a month to take an HSA

medical expenses that could otherwise

Purpose of Form

deduction for that month (see

be deducted on Schedule A (Form

Use Form 8889 to:

Last-month rule next).

1040). See the Instructions for

Schedule A and Pub. 502, Medical and

Last-month rule. If you are an eligible

•

Dental Expenses. Expenses incurred

Report health savings account (HSA)

individual on the first day of the last

before you establish your HSA are not

contributions (including those made on

month of your tax year (December 1 for

qualified medical expenses. If, under

your behalf and employer

most taxpayers), you are considered to

the last-month rule, you are considered

contributions),

be an eligible individual for the entire

to be an eligible individual for the entire

•

year.

Figure your HSA deduction,

year for determining the contribution

•

Testing period. You must remain

Report distributions from HSAs, and

amount, only those expenses incurred

an eligible individual during the testing

•

after you actually establish your HSA

Figure amounts you must include in

period. The testing period begins with

are qualified medical expenses.

income and additional tax you may owe

the last month of your tax year and

if you fail to be an eligible individual.

ends on the last day of the 12th month

Note. Non-prescription medicines

following that month (for example,

(other than insulin) purchased in tax

Additional information. See Pub.

December 1, 2011 – December 31,

years beginning after December 31,

969, Health Savings Accounts and

2012). If you fail to remain an eligible

2010, are not considered qualified

Other Tax-Favored Health Plans, for

individual during this period, other than

medical expenses.

more details on HSAs.

because of death or becoming

disabled, you will have to include in

You cannot treat insurance

income the total contributions made

premiums as qualified medical

Who Must File

that would not have been made except

expenses unless the premiums are for:

You must file Form 8889 if any of the

for the last-month rule. You include this

1. Long-term care (LTC) insurance,

following applies.

amount in income in the year in which

2. Health care continuation

•

you fail to be an eligible individual. This

You (or someone on your behalf,

coverage (such as coverage under

amount is also subject to a 10%

including your employer) made

COBRA),

additional tax. (See Part III.)

contributions for 2011 to your HSA.

3. Health care coverage while

•

Account Beneficiary

You received HSA distributions in

receiving unemployment compensation

2011.

under federal or state law, or

The account beneficiary is the

•

You must include certain amounts in

4. Medicare and other health care

individual on whose behalf the HSA

income because you failed to be an

coverage if you were 65 or older (other

was established.

eligible individual during the testing

than premiums for a Medicare

HSA

period.

supplemental policy, such as Medigap).

Generally, an HSA is a health savings

•

You acquired an interest in an HSA

account set up exclusively for paying

because of the death of the account

Coverage under (2) and (3) can

the qualified medical expenses of the

beneficiary. See Death of Account

be for your spouse or a

TIP

account beneficiary or the account

Beneficiary on page 2.

dependent meeting the

beneficiary’s spouse or dependents.

requirement. For (4), if you, the account

Distributions From an HSA

beneficiary, are under age 65, Medicare

If you (or your spouse, if filing

premiums for your spouse or

jointly) received HSA

Distributions from an HSA used

dependents (who are age 65 or older)

distributions in 2011, you must

exclusively to pay qualified medical

CAUTION

generally are not qualified medical

file Form 8889 with a Form 1040 even if

expenses of the account beneficiary,

expenses.

you have no taxable income or any

spouse, or dependents are excludable

other reason for filing Form 1040.

from gross income. (See the line 15

Nov 01, 2011

Cat. No. 37971Y

Instructions For Form 8889 - Health Savings Accounts - 2011

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