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Non taxable HSA distribution is added to taxable on Sch 1

COSkiBum
Level 3

I have a client that had a HSA distribution on a 1099SA and used it all of qualified medical expense.  On the 8889-S, line 16 shows a "0" taxable amount and says to enter on Sch 1, line 8e.  When I go to Sch 1 line 8e, it should the whole distribution as taxable.  What am I doing wrong?  Thanks.

P.S.  I did search this topic but all the info was from 2019 and not useful.  

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Accepted Solutions
dascpa
Level 11

On the 1099-SA Worksheet did you check distribution code 1, and mark the two boxes for HSA and full amount in box 1 was used for qualified medical expenses?  That will make the 8889-T or S tax-free.

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4 Comments 4
dascpa
Level 11

On the 1099-SA Worksheet did you check distribution code 1, and mark the two boxes for HSA and full amount in box 1 was used for qualified medical expenses?  That will make the 8889-T or S tax-free.

Just-Lisa-Now-
Level 15
Level 15

Fille out the 1099SA worksheet, dont the amount enter it on the 8889.

Then you need to mark the Self or Family box in the smart worksheet below Line 2 on the 8889. 

Dont enter anything else on the 8889


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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COSkiBum
Level 3

Thank you for your quick response.  That worked for me  Happy Day!

COSkiBum
Level 3

Thank you for getting back to me so quickly.  I had done the 1099SA correctly, the issue was on the 8889S.  Thanks to all for your help.  Happy Day

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