Form 8889 issues

[RLuna]

I have not had an HDHP for several years now but have an HSA.  I use the funds in the account to pay for doctors visits. Since I was issued a 1099-SA Distribution from an HSA i entered the amounts from block 1-5 as required. Since I did not have an HDHP in 2020 or 2019 TT seems to keep me in a loop of not being able to answer the questions honestly. I'm stuck and need some help. I can provide more information but really don't know what I messed up yet. I had an HDHP in 2018 but not in 19 or 20.

The form TT keeps pointing me to is 8889-T part I

line 1 "Check the box to indicate your coverage under a high-deductable health plan (HDHP) during 2020" Self only or Family.

[DaveF1006]

In that particular question, you have the option of picking self-only, family, or none. Since you didn't have a HDHP, you will need to pick none. 

[BillM223]

TurboTax has a design difficulty in the Review, in that it assumes that any taxpayer with a form 8889 must have HDHP coverage, which is why you are being asked to fill in this field on Line 1 for Self-only or Family. 

The design does not anticipate your situation in which you have a form 8889 because of your HSA distributions but no longer have any HDHP coverage.

The workaround in this case is to just check Self on line 1 of the 8889 so that you can clear the Review. You have already indicated that you had no HDHP coverage on Line 3 on the 8889, so all the numbers on the form will be correct - you are just doing this to bypass the Review.

You might make a note of what you did and why, not because the IRS will inquire, but because you may wonder next year why you did this...

[RLuna]

Thanks for the help.

When I did that asks me to fill out line 3A1-12 with the options of none self and family.  Should I choose none here or self only like the last one?

[BillM223 · Accepted solution]

NONE.

Actually, this surprises me, because when you indicated that you did not have HDHP coverage at any time in 2020 (you did do that, didn't you?), this should have set every part of Line 3A to None.

Perhaps once you entered the 1099-SA, you left the HSA interview without doing the rest of the interview. You really should go back and do the whole interview.

Note that this may cause the Line 1 thing again in the Review, but you now know to mark that as Self.

You should not see the Review complaining about the Line 3A boxes.

Note, you and your spouse (if one) will see a question, "What type of HDHP coverage did [name] have on December 1, 2019?" (yes, 2019). When you see this question (whether once or twice), just answer it NONE.

[RLuna]

Yep, every single time. I had two complicating factors I think. 1) Having distributions from the HSA and 2) My company put money in it this year.  I wish I knew more about this prior to ever getting an HSA, seems too complicated. I will certainly think twice if given the opportunity to use one again. 

Thanks again for your help.