dmertz
Level 15
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Deductions & credits

The HSA custodian should have handled this by nonreportable trustee-to-trustee transfer or by simply retitling the account because a spouse beneficiary automatically becomes the owner, but apparently they handled it as a distribution and rollover instead, so it was a distribution.

 

Enter the Form 1099-SA as received.  Indicate that you did not use the money for qualified medical expenses, then indicate that you rolled over the entire amount as jtax indicated.  This will make the distribution nontaxable.  Be sure to answer No when asked if you inherited this HSA (because it became yours by operation of law).

 

Code 4 is not to be used for a spouse beneficiary.

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