If Optum Bank did indeed rollover one of your HSA accounts to another, then they should have sent you a 1099-SA with a distribution code of '1'.
To enter this 1099-SA, please do the following:
A rollover from one HSA to another is shown by form 1099-SA. However, since there is no code for rollover on form 1099-SA (unlike on a 1099-R), you have to take an extra step to tell TurboTax that this 1099-SA is in fact a rollover.
- Enter the 1099-SA as usual.
- On the subsequent screen where you are asked if the distribution was for qualified medical expenses, answer “No”. Two new lines will appear.
- Whether you answer that you spent part of the distribution or none of the distribution on qualified medical expenses, you will see a new line appear: “Amount rolled over into another HSA or MSA”.
- Enter the rollover amount here. The amount rolled over will not be treated as taxable income.
For background, please read "Rollovers" on page 8 in Pub 969.
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