Instructions For Form 8889 - Health Savings Accounts (Hsas)

Lines 17a and 17b

funding distribution (line 10) during the

distributions include amounts paid with

tax year, reduce your limitation (line 8)

a debit card that restricts payments to

Additional 20% Tax

by that distribution before you determine

health care and amounts withdrawn by

whether you have excess employer

other individuals that you have

HSA distributions included in income

contributions. If the excess was not

designated. These amounts should be

(line 16) are subject to an additional

included in income on Form W-2, you

shown in box 1 of Form 1099-SA.

20% tax unless one of the following

must report it as “Other income” on your

exceptions applies.

Line 14b

tax return. However, you can withdraw

Include on line 14b any distributions you

some or all of the excess employer

Exceptions to the Additional 20%

received in 2017 that qualified as a

contributions for 2017 and they will be

Tax

rollover contribution to another HSA.

treated as if they had not been

See Rollovers, earlier. Also include any

The additional 20% tax does not apply

contributed if:

excess contributions (and the earnings

to distributions made after the account

You make the withdrawal by the due

on those excess contributions) included

beneficiary:

date, including extensions, of your 2017

Dies,

on line 14a that were withdrawn by the

tax return (but see the following Note);

Becomes disabled (see Disabled,

due date, including extensions, of your

You do not claim an exclusion from

earlier), or

return. See the instructions for line 13,

income for the amount of the withdrawn

Turns age 65.

earlier.

contributions; and

You also withdraw any income

Line 15

If any of the exceptions apply to any

earned on the withdrawn contributions

of the distributions included on line 16,

Only include on line 15

and include the earnings in “Other

check the box on line 17a. Enter on

distributions from your HSA that

income” on your tax return for the year

line 17b only 20% (0.20) of any amount

were used to pay you for

you withdraw the contributions and

CAUTION

included on line 16 that does not meet

qualified medical expenses (see

earnings.

any of the exceptions.

Qualified Medical

Expenses, earlier) not

Note. If you timely filed your return

reimbursed by insurance or other

Example 1. You turned age 63 in

without withdrawing the excess

coverage and that you incurred after the

2017 and received a distribution from an

contributions, you can still make the

HSA was established. Do not include

HSA that is included in income. Do not

withdrawal no later than 6 months after

the distribution of an excess contribution

check the box on line 17a because you

the due date of your tax return,

taken out after the due date, including

(the account beneficiary) did not meet

excluding extensions. If you do, file an

extensions, of your return even if used

the age exception for the distribution.

amended return with “Filed pursuant to

for qualified medical expenses.

Enter 20% of the amount from line 16 on

section 301.9100-2” written at the top.

line 17b.

In general, include on line 15

Include an explanation of the

Example 2. You turned age 65 in

distributions from all HSAs in 2017 that

withdrawal. Make all necessary

2017. You received distributions that are

were used for the qualified medical

changes on the amended return (for

included in income both before and after

expenses (see

Qualified Medical

example, if you reported the

you turned age 65. Check the box on

Expenses, earlier) of:

contributions as excess contributions on

line 17a because the additional 20% tax

your original return, include an amended

1. You and your spouse.

does not apply to the distributions made

Form 5329 reflecting that the withdrawn

2. All dependents you claim on your

after the date you turned age 65.

contributions are no longer treated as

tax return.

However, the additional 20% tax does

having been contributed).

apply to the distributions made on or

3. Any person you could have

before the date you turned age 65.

claimed as a dependent on your return

Deducting an Excess Contribution

Enter on line 17b, 20% of the amount of

except that:

in a Later Year

these distributions included in line 16.

a. The person filed a joint return.

You may be able to deduct excess

b. The person had gross income of

Part III—Income and

contributions for previous years that are

$4,050 or more.

Additional Tax for Failure

still in your HSA. The excess

c. You, or your spouse if filing

contributions you can deduct in the

To Maintain HDHP

jointly, could be claimed as a dependent

current year is the lesser of the following

Coverage

on someone else's return.

two amounts.

Use Part III to figure any income and

Your maximum HSA contribution limit

For this purpose, a child of

additional tax that must be reported on

for the year minus any amounts

parents that are divorced,

TIP

Form 1040 or Form 1040NR for failure

contributed to your HSA for the year.

separated, or living apart for the

to be an eligible individual during the

The total excess contributions in your

last 6 months of the calendar year is

testing period for:

HSA at the beginning of the year.

treated as the dependent of both

Last-month rule (see

Last-month

rule,

parents whether or not the custodial

earlier), or

Any excess contribution remaining at

parent releases the claim to the child's

A qualified HSA funding distribution

the end of the tax year is subject to the

exemption.

(see the

Instructions for line

10, earlier).

additional tax. See Form 5329.

You cannot take a deduction on

Part II—HSA Distributions

See the discussion, earlier, on

Schedule A (Form 1040) for any

determining the testing period for both

amount you include on line 15.

Line 14a

CAUTION

the last-month rule and a qualified HSA

funding distribution. Include the amount

Enter the total distributions you received

in 2017 from all HSAs. Your total

-6-

Form 8889 (2017)

Instructions For Form 8889 - Health Savings Accounts (Hsas) - 2017 Page 6

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