IRS Form 8889 (HSA)

What is IRS Form 8889?

IRS Form 8889 is used to report contributions to and distributions from a Health Savings Account (HSA). It is attached to Form 1040, 1040-SR, or 1040-NR and is required for taxpayers who made or received HSA contributions (including employer contributions) or took distributions from an HSA. It allows taxpayers to claim a deduction for HSA contributions, report withdrawals, and determine any taxable amounts or penalties owed.

Health Savings Accounts (HSA) are tax-advantaged accounts that help individuals save for qualified medical expenses. It acts like an emergency fund specifically for healthcare costs while offering tax benefits.

Who Needs to File Form 8889?

A taxpayer must file Form 8889 if any of the following applies:

• Made contributions to an HSA for the tax year.
• Received HSA distributions during the tax year.
• Included certain amounts in income due to failing to meet HSA eligibility requirements during the testing period.
• Acquired an interest in an HSA because of the death of the account beneficiary.

For spouses who are receiving HSA distributions in a tax year, Form 8889 must be filed along with Form 1040, Form 1040-SR, or Form 1040-NR.

How to fill out Form 8889

Step 1: Enter Personal Information

Enter taxpayer’s name and Social Security Number (SSN) as shown on the tax return. If filing jointly, both spouses should have separate Form 8889s.

Step 2: Part I – HSA Contributions & Deductions

In this section, you will calculate:

• HSA deduction
• Excess contributions outside of payroll deductions (yours or those made on your behalf)
• Excess employer contributions

Step 3: Part II – HSA Distributions

This section reports HSA withdrawals and whether they were used for qualified medical expenses including Total Distributions (Line 14a), Rollovers and Excess Contributions (Line 14b), Qualified Medical Expenses (Line 15), etc.

Step 4: Part III – Additional Taxes for Loss of Eligibility

Use this section to determine additional income or taxes owed due to failing to maintain High Deductible Health Plan (HDHP) coverage under the last-month rule or an HSA funding distribution. Add adjustments for last-month rule (line 18), Qualified HSA Funding Distributions (Line 19), etc.

Step 5: Filing & Recordkeeping

Once completed, attach Form 8889 to the federal tax return. While it is not required to submit receipts for your medical expenses, you should keep them for at least three years in case of an audit.

HSA Contribution Limits for 2025

Self-only coverage: $4,300

Family coverage: $8,550

Catch-up contribution (age 55+): Additional $1,000

If the contribution is more than these limits, withdraw the excess before the tax deadline (April 15) to avoid a 6% penalty.