Solved: Should taxable excess HSA be shown on 8889 line 16? An amount is being shown properly on Schedule 1, line 21 referencing form 8889, but line 16 on 8889 is blank.
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Should taxable excess HSA be shown on 8889 line 16? An amount is being shown properly on Schedule 1, line 21 referencing form 8889, but line 16 on 8889 is blank.

In 2018 I signed-up for Medicare, so had BOA return all my HSA payroll contributions plus interest. I think the final result is OK, but worry a little about 8889 not being correct. Is it?
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Level 13

Should taxable excess HSA be shown on 8889 line 16? An amount is being shown properly on Schedule 1, line 21 referencing form 8889, but line 16 on 8889 is blank.

Line 16 for form 8889 refers to "taxable distributions". The withdrawal of excess contributions is not considered that type of distribution. The type of taxable distribution it is referring to is a distribution reported on 1099-SA that was NOT all for qualified medical expenses.

Although excess contributions withdrawn and distributions not for qualified medical expenses both end up on line 21 (line 8 in tax year 2019) as Other Income, the excess contributions that are withdrawn are not supposed to be on line 16.

Your 8889 is OK.

 

[Edited 3/26/2020 2:13 pm CDT - inserted date]

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Level 13

Should taxable excess HSA be shown on 8889 line 16? An amount is being shown properly on Schedule 1, line 21 referencing form 8889, but line 16 on 8889 is blank.

Line 16 for form 8889 refers to "taxable distributions". The withdrawal of excess contributions is not considered that type of distribution. The type of taxable distribution it is referring to is a distribution reported on 1099-SA that was NOT all for qualified medical expenses.

Although excess contributions withdrawn and distributions not for qualified medical expenses both end up on line 21 (line 8 in tax year 2019) as Other Income, the excess contributions that are withdrawn are not supposed to be on line 16.

Your 8889 is OK.

 

[Edited 3/26/2020 2:13 pm CDT - inserted date]

View solution in original post

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