Form 8889 (2025) Checklist: Health Savings Account
Purpose
Form 8889 reconciles HSA contributions and distributions for the 2025 tax year. Self-only coverage holders can contribute up to $4,300, while family coverage holders can contribute up to $8,550. Individuals age 55 or older may contribute an additional $1,000 catch-up amount.
The form calculates taxable distributions, applies a 20% penalty on nonqualified withdrawals, and enforces HDHP coverage requirements. Qualified distributions for medical expenses remain tax-free, while excess contributions and nonqualified expenses trigger income inclusion and additional tax.
Filing Requirements
You must file Form 8889 if any of the following apply:
- You, your employer, or another party made contributions to your HSA during 2025
- Did your HSA make any distributions during 2025
- You failed to maintain an eligible individual status during a testing period
- You acquired an HSA interest due to an account beneficiary’s death
If you or your spouse received HSA distributions in 2025, you must file Form 8889 with your tax return, even if you have no other filing requirement.
Step-by-Step Filing Instructions for Tax Year 2025
Step 1: Verify HDHP Coverage Status
Confirm you maintained HDHP enrollment on the first day of each month throughout 2025. If coverage lapsed, changed from self-only to family mid-year, or you switched plans, you must use the monthly pro-rata calculation from the Line 3 Limitation Chart and Worksheet. Document your coverage dates using plan documents or employer records. You cannot contribute for any month in which you were enrolled in Medicare or claimed as someone else’s dependent.
Step 2: Report Individual HSA Contributions on Line 2
Enter only contributions you personally made directly to your HSA for 2025, including amounts deposited by the unextended tax return due date of April 15, 2026. Do not include employer contributions, payroll deductions through cafeteria plans, rollovers from another HSA or Archer MSA, or qualified HSA funding distributions. Cafeteria plan contributions made through salary reduction agreements are treated as employer contributions and should be reported on line 9, not line 2.
Step 3: Calculate Your Contribution Limit on Line 3
If you maintained HDHP coverage all 12 months and were under age 55 on December 31, 2025, enter $4,300 for self-only coverage or $8,550 for family coverage. If you had family coverage on December 1, 2025, and use the last-month rule, you are considered to have family coverage for the entire year. If coverage changed during the year or you were not eligible all 12 months, complete the Line 3 Limitation Chart and Worksheet to calculate your prorated limit month-by-month.
Step 4: Report Archer MSA Contributions on Line 4
Suppose you or your spouse contributed to an Archer MSA in 2025; first, complete Form 8853. Transfer the total from Form 8853, lines 1 and 2, to Form 8889, line 4. If either spouse had family HDHP coverage at any time during 2025, include both spouses’ Archer MSA contributions on this single line, even when filing separately.
Step 5: Calculate Your HSA Deduction Limit on Line 6
Subtract line 4 from line 5 to determine your base deduction limit. If both spouses have separate HSAs and either had family HDHP coverage during 2025, you must divide the family contribution limit between you and your spouse. The default is to split equally unless you both agree on a different allocation. Do not exceed the family limit when combining both spouses’ contributions.
Step 6: Add Age 55+ Catch-Up Contributions on Line 7
If you were age 55 or older on December 31, 2025, and maintained HDHP coverage, you may contribute an additional $1,000 catch-up amount. This amount is reported on line 7 if you are married with family coverage at any time during the year. Each spouse age 55 or older can make their own $1,000 catch-up contribution to their separate HSA. The catch-up contribution is not split between spouses; each eligible spouse may contribute the full $1,000 to their account.
Step 7: Report Employer Contributions on Line 9
Enter all employer contributions made to your HSA for 2025, including contributions made through cafeteria plan salary reduction agreements. These amounts should appear on your Form W-2, box 12, code W. Adjust for any employer contributions made in 2025 that applied to 2024, and add any contributions made in early 2026 that apply to 2025. Employer contributions are not deductible on line 13, but they reduce your allowable personal contribution limit.
Step 8: Report Qualified HSA Funding Distributions on Line 10
Enter any one-time qualified HSA funding distribution you received from a traditional IRA or Roth IRA in 2025. This direct trustee-to-trustee transfer is allowed only once in your lifetime. However, you may make a second transfer if you initially had self-only coverage and later changed to family coverage in the same year. The distribution is not taxable, not deductible, and reduces the amount you and others can contribute. You must remain HDHP-eligible during the testing period or face income inclusion and a 10% penalty.
Step 9: Calculate Your HSA Deduction on Line 13
Enter the smaller amount between line 2 and line 12 on line 13. This is your allowable HSA deduction, which you report on Schedule 1, line 13. If line 2 exceeds line 13, you have made excess contributions subject to a 6% excise tax annually until removed. You can withdraw excess contributions and earnings by the tax return due date, plus extensions, to avoid the penalty. The withdrawn contributions are not taxed; however, earnings on excess contributions must be included in taxable income.
Step 10: Report Total HSA Distributions on Line 14a
Enter the total amount withdrawn from all your HSAs during 2025, regardless of how the funds were used. This information appears on Form 1099-SA, box 1. Include all distributions, even those used for qualified medical expenses or rolled over to another HSA. Do not reduce this amount—report the full distribution total.
Step 11: Report Rollovers and Returned Excess Contributions on Line 14b
Enter any 2025 distributions that qualified as tax-free rollovers to another HSA. Also include excess contributions and their earnings that you withdrew by the tax return due date, as well as any extensions. These amounts are subtracted from taxable distributions. Trustee-to-trustee transfers between your HSAs are not reported as distributions at all—they do not appear on line 14a or 14b.
Step 12: Calculate Qualified Medical Expenses on Line 15
Enter only distributions used to pay qualified medical expenses not reimbursed by insurance or other coverage. Include costs for yourself, your spouse, and dependents incurred after the HSA was established. Qualified expenses include unreimbursed medical, dental, and vision care that would be deductible on Schedule A, as well as over-the-counter medicines, menstrual care products, condoms, and personal protective equipment. Do not include insurance premiums except for long-term care insurance, COBRA continuation coverage, health insurance while receiving unemployment compensation, or Medicare premiums if you are age 65 or older.
Step 13: Calculate Taxable Distributions on Line 16
Subtract line 15 from line 14c to determine your taxable HSA distributions. This amount is included in your gross income on Schedule 1, line 8f. Any distribution not used for qualified medical expenses is taxable and generally subject to an additional 20% penalty unless an exception applies.
Step 14: Determine Additional 20% Tax on Line 17b
If line 16 shows taxable distributions, you generally owe an additional 20% tax on that amount. Exceptions apply if distributions occurred after you turned age 65, became disabled, or died. If any exception applies, check the box on line 17a and enter on line 17b only 20% of distributions that do not meet an exception. Report this additional tax on Schedule 2.
Step 15: Complete Part III for Testing Period Failures
If you used the last-month rule to maximize contributions but failed to remain HDHP-eligible during the testing period, or if you received a qualified HSA funding distribution and failed the testing period, complete Part III. Calculate the amount that must be included in income and report it on Schedule 1. You will also owe a 10% additional tax on this amount, reported on Schedule 2. The testing period runs from the last month of the tax year through the end of the following year.
Important Reminders
Your HSA trustee and health insurance provider must meet IRS requirements under Code section 223. Verify compliance before making contributions. Maintain detailed records of all contributions, distributions, and medical expenses to ensure accurate tracking and reporting. Keep receipts for qualified medical expenses in case of an IRS examination. Remember that expenses incurred before your HSA was established are not qualified medical expenses, even if paid with HSA funds later.
If you and your spouse both have HSAs, complete a separate Form 8889 for each spouse. Combine the line 13 amounts from both forms and enter the total on Schedule 1, line 13. Attach both Forms 8889 to your paper tax return.
Contributions made up to April 15, 2026, can be designated for the 2025 tax year. Clearly establish the tax year with your HSA trustee when making contributions between January 1 and April 15 of the following year.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
