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Deductions & credits
The HSA financial institution should be calculating the interest/earnings on the amount of the distribution. It's extremely unusual for them to expect you to do it. They know what the earnings are and how to calculate them - believe me. My advice would be to fill out the form and do not enter the earnings, add a note for them to insert the earnings after it has been calculated.
According to our tax expert @dmertz, here is the link to calculate the earnings if you really need to.
- CFR 1.408-11 describes the required calculation for determining the earnings on your HSA withdrawal
- Net Income=Contribution×(Adjusted Closing Balance−Adjusted Opening Balance)/Adjusted Opening Balance.
@Bradley_C
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February 21, 2022
9:16 AM