Do I have to report a 1099-SA if I don't want the tax credit?

[jlandjl]

We always had an HSA while my husband was employed.  He is now retired and we have short term health insurance for 2019.  We were unaware, and were not informed by our insurance broker or bank , when we got the short term policies that we could not have an HSA.  Can we have an HSA?  We opened one with a credit union not knowing this rule and used it throughout the year.  Can we just not report the 1099-SA and not take the tax credit?  Thanks

[Bsch4477]

You can withdraw funds from the HSA which are not taxed if used for qualified medical expenses. But you can no longer contribute to it. 

[jlandjl]

Thanks.  My question is do we have to report the form if we don't want to take the tax credit since we supposedly weren't allowed to have an HSA.  I just want to be sure that if we don't report the form it won't be an issue.

[DavidD66]

Yes, you will have to report the 1099-HSA.  That information was also reported to the IRS. You must be covered by a HDHP to participate in an HSA. For 2019, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. An HDHP's total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can't be more than $6,750 for an individual or $13,500 for a family.

[jlandjl]

We had short term health insurance and our deductible was $12,000.00.  Does this qualify?

[BillM223]

@jlandjl

There are more requirements to a health plan being a High Deductible Health Plan than just the size of the deductible.

Please contact your insurer and ask them if it is an HDHP. They will know.

[Bsch4477]

If you had an HSA while you had a HDHP you are allowed to keep it. Is that your situation?  If So, use that form to report your distribution and report if they were used for qualified medical expenses. The form does not qualify you for any credits and has to be reported.