Inherited HSA Distribution

[Camille 43081]

My brother-in-law passed away in December, 2020, and my husband was the designated beneficiary on his employer sponsored HSA account.  The full amount that was in the account was distributed to us in 2021.  I have contacted the plan to get a 1099, as a non-spousal distribution from an HSA is taxable income to the recipient.  When I call in, everyone I talk to agrees that there should have been a 1099 issued - my guess is 1099-SA.  They escalate our question to research, and in two or three days I get a secure email saying there are no tax documents for the account.   I've done this three times now.  Should I just go ahead and report the distribution as if we did get a 1099-SA?

[PattiF]

The money that you received from the inherited HSA is taxed as ordinary income. You should enter that amount in your tax return as other income. Since you did not receive a 1099-SA as you should have, do not enter this as though you did receive a 1099-SA.

To enter Other Income, please follow the steps below:

• Open your return.
• Click on Income & Expenses.
• Scroll to the bottom under Less Common Income and select Start (or Update) for Miscellaneous Income.
• Choose Other reportable income at the bottom of the list and start

For the description, use Inherited HSA - no 1099-SA

[Camille 43081]

Thank you.  This makes sense.