Form 8889, Line 10

[dflex]

Please someone tell me how to get to interview question asking if I made a Qualified HSA Funding Distribution in 2019 (IRA to HSA contribution).  I  know for sure it's reported on form 8889, line 10 and direct entry onto form is unacceptable to TT Hm & Bz 2019.

Thanks, D

[AnnetteB6]

The question comes up as part of the follow-up question after you have entered the Form 1099-R reporting the distribution from the IRA.  

You will see 'Did ___ put this money from ___ in a Health Savings Account (HSA)?'

@dflex

[dflex]

I Greatly appreciate your help.

My IRA trustee says they will not provide a 1099-R for this "transfer" as they call it. However, I do have a different 1099-R for another reportable event. Should I click on: Add another 1099-R to add as much info as I can about the Qualified HSA Funding Distribution / without the 1099-R ?  

[BillM223]

Yes, you will enter a "fake" 1099-R so that you can report the HFD (HSA Funding Distribution) in TurboTax correctly, as Annette says. 

Note that you may have difficulty in the TurboTax federal review if you don't enter things like IRA trustee's name and address and FEIN. If you have another 1099-R from the same trustee, just copy that information over, so you can clear the federal review.

Eventually, doing this may generate a letter form the IRS asking why you reported a 1099-R that was not reported by the trustee; just keep notes of this in your tax file so that you can remember that you did this so that TurboTax would report the HFD correctly.

[dflex]

I entered the "fake 1099-R info along with supporting details. However, this did not result in an entry on form 8889, Line 10. Still hitting same brick wall I've been on for days??

[BillM223]

When you entered the 1099-R, in the screen or two after the entry, did you see the question on whether you had this transferred to an HSA? And you answered "yes" (to your HSA)?

Did you make any other contributions to your HSA in 2019? The HFD is counted as a contribution against the annual limit just like any other contribution.

Did you go back through the HSA interview? Do a Search (upper right) for hsa and click on the jump-to link. Go all the way to the end of the interview.

NOTE: there are two 8889s on your return, the 8889-T for the taxpayer and the 8889-S for the spouse (even if you don't have one). Make sure that the HFD didn't end up on the wrong 8889.

[dflex]

*Unfortunately, I did not get a question about "transferring" to HSA. The closest question was: Did you contribute to your HSA this year - and just above the question, it said do not include IRA & couple other types of contributions here. I tried it anyway & it reduced my state tax amount. But this transfer is not supposed to be deductible nor taxable. since it did not insert anything on form 8889, line 10, I backed it out.

*The transfer was my only contribution for the year. 

*I am aware of the T & S forms, but thanks for asking.

*Thinking I may have to delete both 8889 forms & start interview over. Hoping that might trigger the Qualified HSA funding distribution question??

* l will also try the HSA search / jump. 

Thanks so much!

[BillM223 · Accepted solution]

When you enter the 1099-R, afterwards you will be asked on the next screen (or two) about "What Did You Do With The Money From ".

Answer, "[name] did something else with it"

The next screen should ask "Did [name] put this money into a Health Savings Account?"

Answer yes, then enter the amount - this should go to box 10 on the 8889.

What did you see?

[dflex]

Thank you very much! Think it was the question about what I did with the money & the answer "something else" that got me over the hurdle - and clicking box 7 Normal distribution on the subst 1099-R. I had to amend my return to get this info added to form 8889, line 10. But with your & Annette's help it worked. Yeah!!

Would you have any idea if I need to amend State now that I am amending Federal? No change in numbers, just reporting the Qualified HSA Funding Distribution, event. I'm thinking no on State??

Thanks Again for your assistance!

[BillM223]

I am glad that this worked for you.

What state?

[TK32]

This does not come up with an option for putting it into an HSA.

It assumes I am complete then asks did I take any disaster distributions 

[BillM223]

Here is a work-around.

Go ahead and enter the 1099-R (I assume that you received a 1099-R with a distribution code of 7, and that the source was a traditional IRA).

Answer that you did "something else with it", and finish the rest of the 1099-R interview.

This will be taxed (don't worry) on your federal return.

Now go to the HSA interview (if you need to, do a Search on hsa and click on the jump-to link (Mac users must find HSA in the Topics List). Say that you have an HSA, then navigate through through the interview until you see a screen titled "Let's enter [name]'s HSA contributions". On the second line where it says, "Any contributions you personally made", enter the amount of the IRA distribution here.

This will cause the HSA contribution to appear on line 2 of the 8889. Now, this won't appear on line 10, but you see that line 12 will be the same in either case, so your return will be monetarily correct.

The net result is that the 1099-R will be added to income on line 4b on the 1040, and that same amount will be subtracted back out from income on line 12 on Schedule 1 (1040).

Last thing, put a note in your tax file explaining what you did as a workaround in case anyone ever asks you about this (not likely).

Does this work for you?

[vegas_man]

---

@BillM223 wrote:

When you enter the 1099-R, afterwards you will be asked on the next screen (or two) about "What Did You Do With The Money From ".

Answer, "[name] did something else with it"

The next screen should ask "Did [name] put this money into a Health Savings Account?"

Answer yes, then enter the amount - this should go to box 10 on the 8889.

What did you see?

---

This does not work in the 2023 version of TurboTax. How do we get box 10 on the 8889 to populate?

[BillM223]

@vegas_man 

All of these screenshots are from the 2023 desktop software. So where did your experience deviate from the screenshots below?

Click Continue

Click on Continue

Click on Continue

Click on Continue

Click on Continue

Set the options as seen here and click on Continue

(yay!) Click on Continue.

Set the options as noted and then enter the amount of the 1099-R that goes to the HSA. NOTE: this contribution must fall under the annual HSA contribution limit, which make this option much less worth than you would think.

[vegas_man]

Bill, you already told me it doesn't work: https://ttlc.intuit.com/community/file-with-turbotax/discussion/re-form-1099-r-smart-worksheet-missi...

It's not supported by TurboTax.