Form 8889: Health Savings Accounts (HSAs) – 2015 Tax Year Guide

What the Form Is For

Form 8889 is the IRS document you use to report all activity related to your Health Savings Account (HSA) for the 2015 tax year. An HSA is a special savings account that lets you set aside pre-tax money to pay for qualified medical expenses when you have a high-deductible health plan (HDHP).

This form accomplishes four key purposes:

• Reports contributions made to your HSA during 2015
• Calculates your HSA tax deduction
• Reports any money withdrawn from your HSA
• Figures any additional taxes owed if you didn’t maintain proper HDHP coverage

You must attach Form 8889 to your Form 1040 tax return, and if you received any HSA distributions during 2015, you must file it even if you otherwise wouldn’t need to file a tax return.

About Form 8889 – IRS

When You’d Use Form 8889 (Late / Amended Filing)

Late Filing Scenarios

You must file Form 8889 with your 2015 tax return (normally due April 18, 2016) if any of the following apply:

• You or someone on your behalf made HSA contributions in 2015
• You received HSA distributions in 2015
• You failed to maintain eligible HDHP coverage during a required "testing period"
• You became the beneficiary of someone else’s HSA

You can still make 2015 HSA contributions up to April 18, 2016, and they will count for your 2015 return.

Amended Return Situations

You must file Form 1040X with a corrected Form 8889 if you:

• Forgot to attach Form 8889 to your original return
• Reported incorrect contribution or distribution amounts
• Failed to report excess contributions
• Miscalculated your contribution limit due to mid-year coverage changes
• Need to include excess employer contributions not shown correctly on your W-2

If you forgot to withdraw excess contributions by the filing deadline, you have six months after the due date (October 18, 2016) to withdraw them and file an amended return. Write:

“Filed pursuant to section 301.9100-2”
at the top of the amended return.

2015 Instructions for Form 8889 – IRS

Key Rules for 2015

Contribution Limits

• Self-only: $3,350
• Family: $6,650
• Catch-up contribution (age 55+): +$1,000

HDHP Qualification Requirements (2015)

• Minimum deductible:
  • $1,300 (self-only)
  • $2,600 (family)
• Maximum out-of-pocket:
  • $6,450 (self-only)
  • $12,900 (family)

Eligibility Requirements

To contribute to an HSA, you must:

• Be covered by a qualifying HDHP
• Have no disqualifying additional coverage
• Not be enrolled in Medicare
• Not be claimed as someone else’s dependent

The Last-Month Rule and Testing Period

If you were HSA-eligible on December 1, 2015, you're treated as eligible for the full year.

However, a testing period runs through December 31, 2016.
If you lose eligibility during this period, you must:

• Add the extra contribution amount to income, AND
• Pay a 10% penalty

Distributions

• Tax-free if used for qualified medical expenses
• Taxable + 20% penalty if used for non-medical expenses and you’re under age 65
• Medical expenses must be incurred after the HSA was established

2015 Instructions for Form 8889 – IRS

Step-by-Step: How to Complete Form 8889 (High Level)

Part I — HSA Contributions and Deduction

Key Steps

• Check your coverage type (self-only or family)
• Line 2: Enter 2015 contributions made by you (including early 2016 contributions designated for 2015)
• Line 3: Enter your contribution limit (based on coverage and eligible months)
• Line 8: Add catch-up contribution if age 55+
• Line 9: Employer contributions (from W-2, box 12, code W)
• Line 13: Your allowable HSA deduction

Part II — HSA Distributions

• Line 14a: Total distributions (from Form 1099-SA)
• Line 15: Qualified medical expenses
• Line 16: Taxable distributions (if any)
• Line 17b: 20% penalty if under 65 and used for non-medical purposes

Part III — Additional Tax (Last-Month Rule Failure)

Complete only if you:

• Used the last-month rule, and
• Lost HSA eligibility during the 12-month testing period

This section calculates:

• Extra income
• Additional 10% penalty

Form 8889 – IRS

Common Mistakes and How to Avoid Them

Mistake #1 — Mixing Employer and Personal Contributions

Employer contributions go on line 9, not line 2.
Misreporting inflates your deduction and triggers IRS notices.

Mistake #2 — Over-contributing by Forgetting Employer Contributions

Your limit is total contributions from all sources.
Excess contributions = 6% excise tax per year until fixed.

Mistake #3 — Misunderstanding the Last-Month Rule

You may contribute the full limit only if you keep HDHP coverage through December 2016.
Failing this triggers income inclusion + 10% penalty.

Mistake #4 — Claiming Medical Expenses from Before You Opened the HSA

Only expenses incurred after the HSA was established qualify.

Mistake #5 — Not Reporting Distributions

Even if all distributions were for qualified expenses, you must report them on Form 8889.

Mistake #6 — Forgetting to File Form 8889

If you had any HSA activity, you must file Form 8889—even for small distributions.

2015 Instructions for Form 8889 – IRS

What Happens After You File

IRS Matching

Your form is matched against:

• Form 1099-SA (distributions)
• Form 5498-SA (contributions)

Discrepancies trigger notices requesting:

• HSA statements
• Medical receipts
• Proof of HDHP coverage

Excess Contributions

If unremoved, they face:

• 6% excise tax yearly (reported on Form 5329)

Last-Month Rule Monitoring

If you used the last-month rule:

• Your testing period extends through December 31, 2016
• Any loss of eligibility is reported on 2016 Form 8889
• Extra contributions become taxable + 10% penalty

Long-Term HSA Benefits

• Funds roll over indefinitely
• Tax-free growth
• Tax-free withdrawals for future medical expenses
• After age 65, non-medical withdrawals are taxable without penalty

2015 Instructions for Form 8889 – IRS

Frequently Asked Questions (FAQs)

Do I have to file Form 8889 if my employer made all the contributions and I didn’t take any distributions?

Can married couples share one HSA and file one Form 8889?

What’s the deadline for making 2015 HSA contributions?

If I withdrew money by mistake for a non-medical expense, can I put it back?

Do over-the-counter medicines count as qualified medical expenses?

What happens if I became eligible for Medicare mid-year in 2015?

Can I deduct medical expenses I paid before I opened my HSA if the expenses happened in 2015?

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