Questions on Reporting:
1. With the FSA. do we report contributions AND distributions? if so what FORM to look for
there is no reporting for an FSA
2. With the HSA. do we report just the distributions since there are NO contributions? if so what form to look for
yes. you'll get a 1099-SA towards the end of January or early February. The IRS also gets a copy. Entering this data should complete form 8889 for the taxpayer. It is on the 8889 that the distribution would be shown as being used for qualified medical expenses which will avoid penalties for disqualified distributions.
