Instructions For Form 8889 - Health Savings Accounts Hsas - 2007 Page 2

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than premiums for a Medicare
impairment which can be expected to
expenses. Generally, these
supplemental policy, such as Medigap).
result in death or to continue
distributions are subject to the
indefinitely.
additional 10% tax.
High Deductible Health Plan
Death of Account Beneficiary
Rollovers
An HDHP is a health plan that meets
the following requirements.
If the account beneficiary’s surviving
A rollover is a tax-free distribution
spouse is the designated beneficiary,
(withdrawal) of assets from one HSA or
the HSA is treated as if the surviving
Archer MSA that is reinvested in
Self-only
Family
spouse were the account beneficiary.
coverage coverage
another HSA. Generally, you must
The surviving spouse completes Form
complete the rollover within 60 days
8889 as though the HSA belonged to
after you received the distribution. You
Minimum annual
him or her.
deductible
$1,100
$2,200
can make only one rollover contribution
to an HSA during a 1-year period. See
Maximum annual
If the designated beneficiary is not
Pub. 590, Individual Retirement
out-of-pocket
the account beneficiary’s surviving
Arrangements (IRAs), for more details
expenses*
$5,500 $11,000
spouse, or there is no designated
and additional requirements regarding
beneficiary, the account ceases to be
rollovers.
* This limit does not apply to deductibles and
an HSA as of the date of death. The
expenses for out-of-network services if the plan
beneficiary completes Form 8889 as
Note. If you instruct the trustee of your
uses a network of providers. Instead, only
follows.
deductibles and out-of-pocket expenses (such as
HSA to transfer funds directly to the
copayments and other amounts, but not
Enter “Death of HSA account
trustee of another HSA, the transfer is
premiums) for services within the network should
beneficiary” across the top of Form
not considered a rollover. There is no
be used to figure whether the limit is reached.
8889.
limit on the number of these transfers.
Enter the name(s) shown on your tax
Do not include the amount transferred
An HDHP can provide preventive
return and your SSN in the spaces
in income, deduct it as a contribution,
care and certain other benefits with no
provided at the top of the form and skip
or include it as a distribution on
deductible or a deductible below the
Part I.
line 14a.
minimum annual deductible. For more
On line 14a, enter the fair market
details, see Pub. 969. An HDHP does
Qualified HSA distribution. This is a
value of the HSA as of the date of
not include a plan if substantially all of
distribution from a health flexible
death.
the coverage is for accidents, disability,
spending arrangement (FSA) or health
On line 15, for a beneficiary other
dental care, vision care, or long-term
reimbursement arrangement (HRA) that
than the estate, enter qualified medical
care. An HDHP also cannot be
is contributed by your employer directly
expenses incurred by the account
insurance that you are permitted to
to your HSA. This is a one-time
beneficiary before the date of death
have in addition to an HDHP. See
distribution from any of these
that you paid within 1 year after the
Other Health Coverage next.
arrangements. The distribution is
date of death.
treated as a rollover contribution to the
Complete the rest of Part II.
Other Health Coverage
HSA and is subject to the testing period
If you have an HSA, you (and your
If the account beneficiary’s estate is
rules shown below. See Pub. 969 for
spouse, if you have family coverage)
the beneficiary, the value of the HSA as
more information.
generally cannot have any health
of the date of death is included on the
Testing period. You must remain
coverage other than an HDHP. But
account beneficiary’s final income tax
an eligible individual during the testing
your spouse can have health coverage
return. Complete Form 8889 as
other than an HDHP if you are not
period. The testing period begins with
described above, except you should
covered by that plan. If you have a
the month in which the qualified HSA
complete Part I, if applicable.
distribution is contributed to the HSA
health flexible spending arrangement or
The distribution is not subject to the
and ends on the last day of the 12th
health reimbursement arrangement,
additional 10% tax. Report any
see Pub. 969.
month following that month. For
earnings on the account after the date
example, if the distribution is
Exceptions. You can have additional
of death as income on your tax return.
contributed on June 12, 2007, the
insurance that provides benefits only
testing period ends on June 30, 2008. If
for:
Deemed Distributions From
you fail to remain an eligible individual
Liabilities under workers’
HSAs
during this period, other than because
compensation laws, tort liabilities, or
of death or becoming disabled, you will
The following situations result in
liabilities arising from the ownership or
have to include the qualified HSA
deemed distributions from your HSA.
use of property,
distribution in income in the year in
You engaged in any transaction
A specific disease or illness, or
which you fail to be an eligible
prohibited by section 4975 with respect
A fixed amount per day (or other
individual. This amount is also subject
to any of your HSAs, at any time in
period) of hospitalization.
to a 10% additional tax. (See Part III.)
2007. Your account ceases to be an
You can also have coverage (either
HSA as of January 1, 2007, and you
through insurance or otherwise) for
must include the fair market value of all
accidents, disability, dental care, vision
assets in the account as of January 1,
Specific Instructions
care, or long-term care.
2007, on line 14a.
You used any portion of any of your
Name and social security number
For information on prescription drug
HSAs as security for a loan at any time
(SSN). Enter your name(s) as shown
plans, see Pub. 969.
in 2007. You must include the fair
on your tax return and the SSN of the
market value of the assets used as
Disabled
HSA beneficiary. If married filing jointly
security for the loan as income on line
and both you and your spouse have
An individual generally is considered
21 of Form 1040 or Form 1040NR.
HSAs, complete a separate Form 8889
disabled if he or she is unable to
for each of you.
engage in any substantial gainful
Any deemed distribution will not be
activity due to a physical or mental
treated as used to pay qualified medical
-2-

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