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Common questions on Form 8889 in ProSeries

by Intuit• Updated 3 months ago

This article will help you:

  • Understand the flow of Health Savings Account (HSA) information throughout your client’s return
  • Understand how to enter HSA information in Intuit ProSeries

If HSA contributions we're on the W-2:

  1. Open the W-2 Worksheet.
  2. Enter the contributions made through the employer on box 12 with a code W.
  3. Press F6 to bring up Open Forms.
  4. Type 8889, select the copy for the taxpayer or spouse and select OK.
  5. In the Line 3 Smart Worksheet fill in the information about the type of plan.
  6. Enter any contributions not paid through the employer on line 2. Don't duplicate amounts already shown on the W-2.
  7. HSA Distributions entered on 1099-SA flow to Form 8889 Line 14a.
  8. If the taxpayer contributed too much to the HSA, the excess contribution flows to Form 5329 Lines 47 and 48.
  9. For more information about Form 8889, go to the Form 8889 Instructions.

If HSA contributions we're not on the W-2:

  1. Press F6 on your keyboard to bring up Open Forms.
  2. Type 8889 and select OK.
  3. In the Line 3 Smart Worksheet fill in the information about the type of plan.
  4. Enter the contributions on line 2.
  5. HSA Distributions entered on 1099-SA flow to Form 8889 Line 14a
  6. If the taxpayer contributed too much to the HSA, the excess contribution flows to Form 5329 Lines 47 and 48.
  7. For more information about Form 8889, go to the Form 8889 Instructions.
If there is an excess HSA contribution, the Fair Market Value from the 5498-SA needs to be entered on Form 5329 HSA Value Smart Worksheet.

Form 8889, line 15 will flow amounts from:

  • The gross distributions of all Form 1099-SA Worksheets for which the HSA box is selected and the box stating that the "full amount in box 1 was used to pay qualified medical expenses..."
  • All Form 1099-SA Worksheets for which the HSA box is selected and an amount is entered in the "Partial amount in box 1 used to pay qualified medical expenses..."
  • The amount from Line G of the Line 14 Smart Worksheet (Form 8889)

f the unreimbursed qualified medical expenses should flow to Form 8889-S for the spouse, make sure that the spouse's 1099-SA box is selected at the top of the Form 1099-SA Worksheet.

Per the IRS instructions for Form 8889, Line 15:

"Only include on line 15 distributions from your HSA that were used to pay you for qualified medical expenses (see Qualified Medical Expenses, earlier) not reimbursed by insurance or other coverage and that you incurred after the HSA was established. Do not include the distribution of an excess contribution taken out after the due date, including extensions, of your return even if used for qualified medical expenses..

In general, include on line 15 distributions from all HSAs in 2021 that were used for the qualified medical expenses (see Qualified Medical Expenses, earlier) of:

  1. You and your spouse.
  2. All your dependents.
  3. Any person who would be a dependent except that:
    • The person filed a joint return.
    • The person had gross income.
    • You, or your spouse if filing jointly, are dependents of someone else."

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