Form 8889: Health Savings Accounts (HSAs) – 2013 Tax Year Summary
What Form 8889 Is For
Form 8889 is the IRS tax form you use to report all activity related to your Health Savings Account (HSA) during the 2013 tax year. An HSA is a special tax-advantaged savings account designed to help you pay for medical expenses if you're covered by a high-deductible health plan (HDHP). You use Form 8889 to accomplish four main tasks: report all contributions made to your HSA (whether by you, your employer, or anyone else on your behalf), calculate your allowable HSA deduction on your tax return, report any money you withdrew (distributions) from your HSA during the year, and determine if you owe any additional taxes if you didn't follow the HSA rules properly. The form attaches to your Form 1040 or 1040NR and ensures the IRS knows you're using your HSA correctly and taking only the tax benefits you're entitled to receive.
When You'd Use Form 8889 (Including Late or Amended Returns)
You must file Form 8889 if any of these situations apply to you for 2013: someone (you, your employer, or anyone else) made contributions to your HSA during 2013; you took any distributions (withdrawals) from your HSA in 2013, regardless of what you used the money for; you need to report income because you violated the ""testing period"" rule (more on this later); or you inherited an HSA when the original account owner passed away. Even if you had no taxable income or wouldn't normally file a tax return, you still must file Form 1040 with Form 8889 attached if you or your spouse received HSA distributions in 2013. For late or amended situations, if you contributed too much to your HSA and need to withdraw the excess, you have until six months after your original return's due date to make the withdrawal and file an amended return—write ""Filed pursuant to section 301.9100-2"" at the top and explain the correction. Similarly, if you initially failed to file Form 8889 but should have, you'll need to file an amended return with the form attached to correct your tax situation.
Key Rules or Details for Tax Year 2013
To qualify for an HSA in 2013, you needed to meet several requirements: be covered by an HDHP on the first day of the month, have no other health coverage (with certain exceptions like dental, vision, or accident insurance), not be enrolled in Medicare, and not be claimed as a dependent on someone else's tax return. For 2013, an HDHP meant a plan with a minimum annual deductible of $1,250 for self-only coverage or $2,500 for family coverage, and maximum annual out-of-pocket expenses of $6,250 (self-only) or $12,500 (family).
The contribution limits for 2013 were straightforward: $3,250 for self-only HDHP coverage and $6,450 for family coverage. If you were age 55 or older by December 31, 2013, you could contribute an additional $1,000 ""catch-up"" amount. These limits applied to the total of all contributions—yours, your employer's, and anyone else's combined. Employer contributions shown in Box 12 of your W-2 (code W) counted toward your limit and reduced how much you could personally contribute.
The ""last-month rule"" was a special provision: if you were an eligible individual on December 1, 2013, you were considered eligible for the entire year and could contribute the full annual amount—even if you only had HDHP coverage for that one month. However, there was a catch: you had to remain an eligible individual throughout the ""testing period"" (December 1, 2013, through December 31, 2014). If you failed this test (except due to death or disability), you had to include the extra contribution in your income and pay a 10% penalty.
IRS Form 8889 Instructions 2013 | IRS Publication 969 2013
Step-by-Step (High Level)
Part I: Contributions and Deduction
Form 8889 has three main sections. Part I handles contributions and calculates your deduction. Start by checking whether you had self-only or family coverage—choose the type you had longest during the year, or if you had family coverage on December 1, pick ""family."" On line 2, enter all contributions you (or others on your behalf) made for 2013, including any made by April 15, 2014, that were designated for 2013. Line 3 requires you to calculate your contribution limit based on how many months you were eligible; the instructions include a month-by-month chart to help you figure this out if your coverage changed. Enter employer contributions on line 9 (from your W-2, box 12, code W). Work through lines 10-12 to determine if you had excess contributions. Line 13 shows your allowable HSA deduction, which transfers to Form 1040, line 25.
Part II: Distributions
Part II deals with distributions (withdrawals). Enter your total HSA distributions on line 14a (from Form 1099-SA, which your HSA trustee sends you). Line 14b accounts for any rollovers or withdrawn excess contributions. On line 15, enter distributions you used for qualified medical expenses—medical costs that you incurred after establishing your HSA and that weren't reimbursed by insurance. Qualified medical expenses include those for you, your spouse, and your dependents. Line 16 shows your taxable distribution (the difference between total distributions and qualified expenses), which gets reported as income on your Form 1040.
Part III: Additional Taxes
Part III calculates penalties. If you violated the last-month rule testing period or failed to maintain HDHP coverage after making a qualified funding distribution from an IRA to your HSA, this section determines the income you must report and the 10% additional tax you owe. Most people with straightforward HSA situations leave Part III blank.
Common Mistakes and How to Avoid Them
Over-contributing is the most frequent error. Remember that employer contributions count toward your limit—if your employer put in $2,000 and you had self-only coverage (limit: $3,250), you can only contribute $1,250 yourself. Excess contributions trigger a 6% excise tax each year they remain in your account. To avoid this, track all contributions carefully and withdraw any excess (plus earnings) by your tax return due date, including extensions.
Failing the testing period trips up many taxpayers who use the last-month rule. If you established HSA eligibility on December 1, 2013, and contributed the full annual amount, you must remain eligible through all of 2014. Enrolling in Medicare, losing your HDHP coverage, or getting disqualified in 2014 means you'll owe income tax plus a 10% penalty on the portion you wouldn't have been able to contribute without the last-month rule.
Not keeping receipts for qualified medical expenses is dangerous. The IRS may request documentation proving your distributions were used for legitimate medical costs. Keep detailed records, including receipts, explanations of benefits from insurance, and a log showing which HSA distributions paid which medical expenses. Remember: over-the-counter medicines without a prescription (except insulin) don't count as qualified expenses for 2013.
Confusing HSA-eligible coverage leads to unnecessary headaches. Having other non-HDHP coverage (like a spouse's traditional health plan that covers you, or a general-purpose health FSA) disqualifies you from HSA contributions for those months. Know what coverage you had each month and only claim HSA eligibility for months when you met all requirements.
Forgetting to report employer contributions happens when people overlook box 12, code W on their W-2. These amounts don't get included in your income (that's good!) but must be reported on Form 8889 line 9 because they count toward your contribution limit.
What Happens After You File
Once you file Form 8889 with your tax return, your HSA deduction (from line 13) reduces your adjusted gross income, lowering your overall tax bill. This is an ""above-the-line"" deduction, meaning you get it even if you don't itemize. The IRS will process your return and verify that your contributions and distributions align with the information your HSA trustee reported on Forms 5498-SA and 1099-SA.
Your money stays in your HSA and continues growing. Unlike flexible spending accounts, HSA funds don't expire—you keep the account balance indefinitely, even if you change employers, change health plans, or eventually enroll in Medicare. The account remains yours, and you can withdraw the money tax-free at any time for qualified medical expenses incurred after you established the account.
If you took taxable distributions (line 16), you'll pay income tax on that amount, plus an additional 20% tax unless you met an exception (age 65+, disabled, or deceased). The IRS will check whether you properly reported this income on your Form 1040.
If the IRS identifies discrepancies—such as contributions exceeding limits, unreported distributions, or missing forms—you'll receive a notice requesting clarification or proposing changes to your return. Respond promptly with documentation. In severe cases involving prohibited transactions (using your HSA as collateral for a loan, for example), your entire HSA could lose its tax-exempt status, and all assets would become taxable income.
FAQs
Can I contribute to an HSA for 2013 after the year ends?
Yes, you have until April 15, 2014, to make contributions for tax year 2013. Make sure you specify to your HSA trustee that the contribution is designated for 2013, not 2014.
What if both spouses have HSAs and family coverage?
If you both have family HDHP coverage in 2013, the family contribution limit ($6,450) must be divided between you. You can split it equally ($3,225 each) or agree on any other allocation. Each spouse age 55+ can add their own $1,000 catch-up contribution, but it must go into that spouse's own HSA.
Do I report HSA contributions on Form 8889 even if my employer made them?
Yes. Employer contributions appear in box 12 of your W-2 with code W and must be reported on Form 8889, line 9. They're not included in your taxable income, but they count toward your annual contribution limit.
What happens if I withdraw money for non-medical expenses?
The distribution becomes taxable income (reported on line 16), and you'll generally owe an additional 20% penalty tax on top of regular income tax. The penalty doesn't apply if you're 65 or older, disabled, or deceased at the time of distribution.
Can I use HSA money for my adult child's medical expenses?
Only if you claim your child as a dependent on your 2013 tax return. If your child files their own return or has gross income of $3,900 or more (and you don't claim them), their medical expenses are not qualified medical expenses for your HSA.
What if I had an HSA but wasn't actually eligible for some months?
You can only contribute for the months you met all eligibility requirements. Use the Line 3 Limitation Chart and Worksheet in the Form 8889 instructions to calculate your prorated contribution limit based on months of eligibility.
Are dental and vision expenses considered qualified medical expenses?
Yes. Dental and vision care expenses are qualified medical expenses for HSA purposes, even though dental and vision insurance itself doesn't disqualify you from HSA eligibility. You can have an HDHP plus separate dental/vision coverage and still contribute to an HSA.
