HSA rollover

Forum|Forum|4 years ago
December 28, 2021
1 reply
7 views

Happy almost new year!

Just a few questions that I have for the TurboCommunity!

During 2021, I rolled over my previous employer's HSA funds to my new employer's HSA. Assuming that I will get a tax document from both HSA administrators this upcoming February, are there any other documents that I should provide to the IRS (when I file through Turbotax) that clearly indicates that this was in fact a rollover that I did, and not a distribution? I just want to make it clear to the IRS that I did not distribute anything, I simply moved my money from one HSA to another.

Also, I got an e-mail a few weeks ago stating that TurboTax free file is no longer an option? If that's the case, what "package" would you recommend that I get considering that I have some taxable investment accounts that I need to report my earnings for?

Also, do you guys have any helpful websites / discounts that I can access in order to provide me with a Turbotax discount? I still want to stick with Turbotax and not another tax-filing option because I love how easy it is to use haha and I'm not good with taxes nor technology whatsoever.

I really appreciate any insight you can provide!

BillM223

Level 15

In early 2022, you should get a 1099-SA for the rollover as well as a separate 1099-SA for any medical expenses you paid from the new HSA. (In fact, if you paid any medical expenses with the old HSA before you rolled it over, you'll get another 1099-SA for that, too).

Look at your 1099-SAs and determine which one is the rollover (you'll have to go by the amount in Box 1).

Then please see the following answer from previous years (I imagine the new software will still work the same way):

A rollover from one HSA to another is shown by form 1099-SA. However, since there is no code for rollover on form 1099-SA (unlike on a 1099-R), you have to take an extra step to tell TurboTax that this 1099-SA is in fact a rollover.

Enter the 1099-SA as usual.
On the subsequent screen where you are asked if the distribution was for qualified medical expenses, answer “No”. Two new lines will appear.
Whether you answer that you spent part of the distribution or none of the distribution on qualified medical expenses, you will see a new line appear: “Amount rolled over into another HSA or MSA”.
Enter the rollover amount here. The amount rolled over will not be treated as taxable income.

I answered your HSA question because I wanted you to not dangle waiting for an answer to a tax question. As for your other questions on product versions, I encourage you to make a separate post with just those questions (and not the HSA), so that a product specialist can reply to it.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

melissaforpeace315Author

Level 5

@BillM223

Thank you so much for your response! If I follow your above steps, will the IRS be notified that my HSA rollover was in fact, a rollover instead of a "distribution"? I just want to make sure that I'm following all the necessary/required steps to indicate to them that this is a rollover because I don't want to be taxed for this.

I really appreciate your help!

BillM223

Level 15

When you do the HSA interview as I indicated above (entering that the 1099-SA was for a rollover), then this amount should be included on line 14b on the 8889 where it says, "Distributions included on line 14a that you rolled over to another HSA." That's how the IRS will know that it was a rollover.

@melissaforpeace315

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