Instructions For Form 8889 - 2016


Department of the Treasury
Internal Revenue Service
Instructions for Form 8889
Health Savings Accounts (HSAs)
Section references are to the Internal Revenue
you are an eligible individual, anyone
from gross income. (See the
Line 15
Code unless otherwise noted.
can contribute to your HSA. However,
instructions for information on medical
you cannot be enrolled in Medicare or
expenses of dependents not claimed on
Future Developments
be claimed as a dependent on another
your return.) You can receive
person's tax return. An individual
distributions from an HSA even if you
For the latest information about
doesn't fail to be treated as an eligible
are not currently eligible to have
developments related to Form 8889 and
individual for any period merely
contributions made to the HSA.
its instructions, such as legislation
because the individual receives hospital
However, any part of a distribution not
enacted after they were published, go to
care or medical services under any law
used to pay qualified medical expenses
administered by the Secretary of
is includible in gross income and is
Veterans Affairs for a service-connected
subject to an additional 20% tax unless
General Instructions
disability. You must be, or be
an exception applies.
considered, an eligible individual on the
Purpose of Form
first day of a month to take an HSA
Qualified Medical Expenses
deduction for that month (see
Use Form 8889 to:
Generally, qualified medical expenses
Last-month rule
for HSA purposes are unreimbursed
Report health savings account (HSA)
Last-month rule. If you are an eligible
medical expenses that could otherwise
contributions (including those made on
individual on the first day of the last
be deducted on Schedule A (Form
your behalf and employer contributions),
month of your tax year (December 1 for
1040). See the Instructions for
Figure your HSA deduction,
most taxpayers), you are considered to
Schedule A and Pub. 502, Medical and
Report distributions from HSAs, and
be an eligible individual for the entire
Dental Expenses. Expenses incurred
Figure amounts you must include in
before you establish your HSA are not
income and additional tax you may owe
qualified medical expenses. If, under
if you fail to be an eligible individual.
Testing period. You must remain
the last-month rule, you are considered
an eligible individual during the testing
Additional information. See Pub.
to be an eligible individual for the entire
period. The testing period begins with
969, Health Savings Accounts and
year for determining the contribution
the last month of your tax year and ends
Other Tax-Favored Health Plans, for
amount, only those expenses incurred
on the last day of the 12th month
more details on HSAs.
after you actually establish your HSA
following that month (for example,
are qualified medical expenses.
Who Must File
December 1, 2016 – December 31,
2017). If you fail to remain an eligible
You must file Form 8889 if any of the
Note. Only prescribed medicines or
individual during this period, other than
following applies.
drugs (including over-the-counter
because of death or becoming disabled,
You (or someone on your behalf,
medicines and drugs that are
you will have to include in income the
including your employer) made
prescribed) and insulin (even if
total contributions made that would not
contributions for 2016 to your HSA.
purchased without a prescription) for the
have been made except for the
You received HSA distributions in
account beneficiary, the account
last-month rule. You include this amount
beneficiary's spouse or dependent(s),
in income in the year in which you fail to
You must include certain amounts in
are qualified medical expenses.
be an eligible individual. This amount is
income because you failed to be an
also subject to a 10% additional tax.
You cannot treat insurance premiums
eligible individual during the testing
as qualified medical expenses unless
the premiums are for:
You acquired an interest in an HSA
Account Beneficiary
1. Long-term care (LTC) insurance,
because of the death of the account
The account beneficiary is the individual
beneficiary. See
Death of Account
2. Health care continuation
on whose behalf the HSA was
Beneficiary, later.
coverage (such as coverage under
If you (or your spouse, if filing
3. Health care coverage while
jointly) received HSA
distributions in 2016, you must
receiving unemployment compensation
file Form 8889 with Form 1040 even if
under federal or state law, or
Generally, an HSA is a health savings
you have no taxable income or any
account set up exclusively for paying
4. Medicare and other health care
other reason for filing Form 1040.
the qualified medical expenses of the
coverage if you were 65 or older (other
account beneficiary or the account
than premiums for a Medicare
beneficiary's spouse or dependents.
supplemental policy, such as Medigap).
Coverage under (2) and (3) can
Eligible Individual
Distributions From an HSA
be for your spouse or a
To be eligible to have contributions
Distributions from an HSA used
dependent meeting the
made to your HSA, you must be
exclusively to pay qualified medical
requirement. For (4), if you, the account
covered under a high deductible health
expenses of the account beneficiary,
beneficiary, are under age 65, Medicare
plan (HDHP) and have no other health
spouse, or dependents are excludable
premiums for your spouse or
coverage except permitted coverage. If
Dec 02, 2016
Cat. No. 37971Y


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