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Do I need to claim inherited HSA distribution on my taxes? If so, how should I respond to TurboTax online prompts to correctly claim this income?
I have a 1099-SA with numbers only in boxes 1 (gross distribution) and 4 (FMV on date of death). However TurboTax online fails to import a photo of this form and there appears to be no way to manually enter it. When I specifically navigate to HSA section through the help menu... I'm not sure whether to claim that I paid for anything with the HSA. If I say no, there is a question about whether the HSA is inherited. When I answer yes, I'm taken to a question about "qualified medical expenses" and "the value of the HSA on Dec 31, 2024" without referencing box numbers. I expect it's on me to find out if my deceased had qualified medical expenses. However, the value of the account on Dec 31 was $0 because it was all distributed by then, but then on the summary page for HSA task it looks like there was no HSA income which doesn't seem correct since a google search shows that inherited HSA income is taxable. So do I put box 1 or box 4 info in the "HSA Account Value" text box....? I appreciate your help! I think the inherited HSA path through TurboTax online could use some revision.