Form 8889: Health Savings Accounts (HSAs) — 2022 Tax Year Guide
What Form 8889 Is For
Form 8889 is the IRS form you use to report all activity related to your Health Savings Account (HSA) when filing your 2022 tax return. An HSA is a special tax-advantaged savings account that lets you set aside money to pay for qualified medical expenses if you're enrolled in a high-deductible health plan (HDHP).
Think of Form 8889 as your HSA "report card" for the IRS. You'll use it to report four key things: (1) all contributions made to your HSA during 2022 (whether you made them, your employer made them, or anyone else contributed on your behalf), (2) calculate your allowable HSA tax deduction, (3) report any money you withdrew from your HSA, and (4) figure out if you owe any additional taxes due to excess contributions or ineligibility issues.
You must file Form 8889 if you (or someone on your behalf) made any HSA contributions in 2022, if you took any distributions from your HSA, or if you need to report income from failing to maintain eligibility during certain "testing periods." The form attaches to your Form 1040, 1040-SR, or 1040-NR. IRS.gov
When You’d Use Form 8889 (Including Late and Amended Filings)
Regular Filing: You file Form 8889 with your regular 2022 tax return, which is due April 18, 2023 (extended from the usual April 15 due to the Emancipation Day holiday in Washington, D.C.). Even if you live outside D.C., this extended deadline applies to everyone.
Important timing note: You can make HSA contributions for tax year 2022 all the way up until April 18, 2023, and they'll still count toward your 2022 limit. Just make sure to tell your HSA trustee that late contributions should be designated for 2022.
Amended Returns: If you discover errors after filing—such as excess contributions you didn't withdraw, or you forgot to report distributions—you'll need to file an amended return using Form 1040-X. If you filed your original return on time but forgot to withdraw excess contributions, you have a special second chance: you can withdraw them up to 6 months after your return's due date (excluding extensions). When you do this, file an amended return with "Filed pursuant to section 301.9100-2" written at the top and include a full explanation. IRS Publication 969
Key Rules for 2022
Eligibility Requirements: To contribute to an HSA, you must be an "eligible individual," meaning you're covered by a high-deductible health plan (HDHP), have no other disqualifying health coverage, aren't enrolled in Medicare, and can't be claimed as someone else's dependent.
2022 HDHP Requirements:
- Minimum deductible: $1,400 (self-only) or $2,800 (family)
- Maximum out-of-pocket expenses: $7,050 (self-only) or $14,100 (family)
2022 Contribution Limits:
- Self-only coverage: $3,650
- Family coverage: $7,300
- Additional "catch-up" contribution if age 55 or older: $1,000
The Last-Month Rule: If you're eligible on December 1, 2022, you can contribute the full annual amount even if you weren't eligible the entire year. However, you must remain eligible through December 31, 2023 (the "testing period"), or you'll owe taxes and a 10% penalty on contributions you wouldn't have been allowed without this rule.
Qualified Medical Expenses: HSA funds can be used tax-free for unreimbursed medical expenses for you, your spouse, or dependents. This includes most medical, dental, and vision expenses. For 2022, over-the-counter medications (even without a prescription), menstrual care products, COVID-19 testing, and personal protective equipment (masks, sanitizers) also qualify. Insurance premiums generally don't count, except for long-term care insurance, COBRA, health coverage while receiving unemployment, and Medicare premiums if you're 65+. IRS Form 8889 Instructions
Step-by-Step: How to Complete Form 8889 (High Level)
Part I – HSA Contributions and Deduction:
- Check whether you had self-only or family HDHP coverage
- Enter all contributions you made (including those made by April 18, 2023, designated for 2022)
- Calculate your contribution limit based on your coverage type and months eligible
- Enter employer contributions (shown in Box 12, Code W on your W-2)
- Calculate your allowable deduction (you can't deduct more than your limit)
Part II – HSA Distributions:
- Enter total distributions received (from Form 1099-SA)
- Subtract any rollover amounts or excess contributions withdrawn properly
- Enter qualified medical expenses you paid with HSA funds
- Calculate taxable distributions (distributions minus qualified expenses)
- Determine if you owe the 20% additional tax (applies unless you're 65+, disabled, or deceased)
Part III – Income and Additional Tax for Testing Period Failures:
Complete this section only if you failed to remain eligible during a testing period after using the last-month rule or making a qualified HSA funding distribution from an IRA. You'll calculate additional income to report and a 10% penalty tax.
Common Mistakes and How to Avoid Them
Mistake #1: Contributing Too Much
Many people don't realize that employer contributions count toward your annual limit. Check your W-2 Box 12 (Code W) and subtract employer contributions from your personal limit. If you over-contributed, withdraw the excess (plus any earnings on it) by your tax return deadline to avoid a 6% excise tax every year the excess remains.
Mistake #2: Using HSA Funds for Non-Qualified Expenses
Taking money out for non-medical expenses before age 65 means paying income tax plus a 20% penalty. Keep excellent records and receipts proving your expenses were qualified medical costs.
Mistake #3: Forgetting About the Testing Period
If you use the last-month rule to contribute the full year's amount but become ineligible before December 31 of the following year, you'll owe taxes and penalties on the extra contributions. Don't use this rule if you're uncertain about maintaining eligibility.
Mistake #4: Confusing Transfers with Rollovers
You can only make one rollover from an HSA or Archer MSA to another HSA per year. However, direct trustee-to-trustee transfers don't count as rollovers and are unlimited. Always request direct transfers to avoid issues.
Mistake #5: Not Reporting Distributions
Even if you used every penny for qualified medical expenses, you must still report distributions on Form 8889. The IRS receives Form 1099-SA from your HSA trustee and will notice if you don't report it.
What Happens After You File
After filing Form 8889 with your tax return, the IRS processes your HSA deduction (which reduces your taxable income) and verifies your reported distributions match what trustees reported on Form 1099-SA. Your HSA deduction appears on Schedule 1, Part II, Line 13 of your Form 1040.
If you owe additional taxes (the 20% penalty on non-qualified distributions or the 10% testing period penalty), these amounts go on Schedule 2 and increase your total tax owed. Excess contributions trigger Form 5329, which calculates the 6% excise tax.
The good news: unlike retirement accounts, HSAs don't have required minimum distributions. Your money can grow tax-free indefinitely and be used for medical expenses at any age. After age 65, you can even withdraw funds for non-medical purposes without the 20% penalty (though you'll still pay regular income tax, just like a traditional IRA).
Keep all medical receipts and HSA statements for at least three years after filing, as the IRS may request documentation during an audit.
FAQs
1. Can I contribute to an HSA for 2022 after the year ends?
2. What happens if both my employer and I contribute—is there a combined limit?
3. Do I need Form 8889 if I only made contributions but took no distributions?
4. Can I use my HSA to pay for my spouse's or children's medical expenses?
5. What if I enrolled in Medicare mid-year—can I still contribute?
6. How do I fix excess contributions discovered after filing my return?
7. Are there any medical expenses that seem qualified but actually aren't allowed?
For complete details and worksheets, visit IRS.gov/Form8889 or consult IRS Publication 969.
