Tax Filing for HSA Accounts
The IRS says that individuals must file Form 8889 if they (or someone on their behalf, including their employer) made contributions to their HSA account. Form 8889 must also be filed if individuals take funds out of an HSA, even if they do not make a contribution to the HSA that year.
While UCAR cannot provide tax advice, we can provide some information concerning the W-2 you will receive for payroll deductions and how it applies to Form 8889. If you need additional tax advice, please consult a qualified tax advisor or the IRS at http://www.irs.gov/
If you had UCAR payroll deductions in 2008 directed to your CIGNA/Chase HSA account, you must file Form 8889 with your IRS 1040 for 2008. Form 8889 can be found at: http://www.irs.gov/pub/irs-pdf/f8889.pdf The 2008 instructions for Form 8889 can also be found at:http://www.irs.gov/pub/irs-pdf/i8889.pdf .
Your payroll deductions for the HSA account will be shown on your W-2 in Box 12, marked code “W”. Because your payroll deductions were taken pre-tax, they are considered “employer contributions” and are to be entered on line 9 of form 8889. Do not enter UCAR payroll deducted contributions on line 2. Since payroll deductions for the HSA were taken pre-tax, you will not be able to claim a deduction on line 13.
Note: If you made after-tax contributions to an HSA account (not payroll deductions) you may be able to claim a deduction on line 13. See the IRS instructions for additional information.
If you took funds out of your HSA account, or had CIGNA withdraw funds to cover your deductible, you should receive a 1099-SA reporting the distribution of funds from your HSA. These distributions from your HSA will be entered on line 14a of form 8889. If you have unreimbursed qualified medical expenses, they may be entered on line 15 of form 8889. Pages 1 and 6 of the IRS instructions explains what may be included as an unreimbursed qualified medical expense.
A sample of a completed form 8889 may be viewed here. This sample is for a family (or couple) covered under the HDHP for the whole year; the employee having $223.07 deducted each payroll for the HSA (and having $5,799.82 reported on the W-2); a $500 withdrawal from the HSA account and $500 in unreimbursed qualified medical expenses.
Any questions pertaining to the HSA tax filing may be directed to Bob Roesch, x8704, broesch@ucar.edu or Laurie Carr, x8702,
lcarr@ucar.edu.
January 2009
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