When you go through the posting of the 1099-SA there is a final check box that indicates that it was all used for Medical Purposes. If this box is not checked it will result in the HSA distribution being taxable.
This will be posted under:
- Wages & Income
- Less Common Income
- Select 1099-SA
- Select the type of plan
- Continue through the interview
- When you get to Did you spend your HSA money on medical expenses only? Say Yes.
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