Do I need file an 8889 if my employer incorrectly funded a HSA when I was not in a high-deductible plan at all that year?

[MayaD · Accepted solution]

Yes, you need to file form 8889.

Taxpayers file Form 8889 to:

• Report health savings account (HSA) contributions (including those made on your behalf and employer contributions).
• Figure your HSA deduction.
• Report distributions from HSAs.
• Figure amounts you must include in income and additional tax you may owe if you fail to be an eligible individual.

If you didn't have HDHP, the contributions are considered excess HSA contribution. You must Withdraw the excess contributions no later than the due date of your tax return for the year the contributions were made to avoid the 6% excise tax. These withdrawals will be considered taxable income.