Form 8889 (2019) Health Savings Accounts Checklist
Purpose
Form 8889 reports HSA contributions, distributions, and tax consequences for tax year 2019. The 2019 contribution limits are $3,500 for self-only coverage and $7,000 for family coverage (representing increases of $50 and $100, respectively, from 2018). If you maintained an eligible high deductible health plan (HDHP) coverage for all 12 months and were under age 55, these standard limits apply. Individuals age 55 or older can contribute an additional $1,000 catch-up contribution. Both spouses with separate HSAs must complete separate Form 8889 worksheets.
Who Must File Form 8889
You must file Form 8889 if any of the following apply:
● You or anyone on your behalf, including your employer, made HSA contributions for 2019
● You received HSA distributions in 2019
● You must include amounts in income for failing to be an eligible individual during the testing period.
● You acquired an HSA interest due to the account beneficiary’s death
Even if you have no taxable income or other filing requirement, you must file Form 8889 with Form 1040, Form 1040-SR, or Form 1040-NR if you or your spouse received HSA distributions in 2019.
Step-by-Step Filing Instructions
Step 1: Complete Form 8853 First (If Applicable)
If you or your spouse made Archer MSA contributions in 2019, complete Form 8853 (Archer MSAs and Long-Term Care Insurance Contracts) before starting Form 8889. You will need amounts from Form 8853, lines 1 and 2, to enter on Form 8889, line 4.
Step 2: Verify Your HDHP Eligibility
Confirm you were an eligible individual with qualifying HDHP coverage during 2019. Check the appropriate box on line 1 indicating whether you had self-only or family coverage. If your coverage type changed mid-year, you cannot use the standard $3,500 or $7,000 limits and must calculate a prorated amount using the Line 3 Limitation Chart and Worksheet in the instructions.
Step 3: Report Your Personal HSA Contributions
On line 2, enter all HSA contributions you made personally (or that others made on your behalf) from January 1, 2019, through April 15, 2020, that were designated for 2019. Do not include employer contributions, cafeteria plan contributions, or rollover amounts on this line.
Step 4: Determine Your Contribution Limit
On line 3, enter your applicable 2019 contribution limit. If you maintained eligible coverage all year and were under age 55 on December 31, 2019, enter $3,500 for self-only coverage or $7,000 for family coverage. If you were age 55 or older, had mid-year coverage changes, or did not maintain coverage all 12 months, see the instructions to calculate your prorated limit.
Step 5: Adjust for Archer MSA Contributions
If you completed Form 8853, enter on line 4 the total amount you and your employer contributed to your Archer MSAs for 2019. If you or your spouse had family HDHP coverage at any time during 2019, also include any spousal Archer MSA contributions. This reduces your available HSA contribution limit.
Step 6: Calculate Your Preliminary Limit
Complete line 5 by subtracting line 4 from line 3. If the result is zero or negative, enter zero. This represents your contribution limit after accounting for Archer MSA contributions.
Step 7: Apply Spousal Coordination Rules
On line 6, enter the amount from line 5. However, if you and your spouse each have separate HSAs and had family HDHP coverage at any time during 2019, you must divide the contribution limit between both spouses. Follow the spousal coordination rules detailed in the Form 8889 instructions for line 6 to determine your allocable share.
Step 8: Calculate Age 55+ Catch-Up Contributions
If you were age 55 or older on December 31, 2019, and were married with family HDHP coverage at any time during 2019, calculate your additional catch-up contribution on line 7. The catch-up amount is $1,000, but it may be prorated based on the number of months you were an eligible individual during the year. If you were unmarried or had self-only coverage throughout the year and were age 55 or older, the $1,000 catch-up is already included on line 3.
Step 9: Determine Your Total Contribution Limit
Add lines 6 and 7 to calculate your total contribution limit on line 8. This represents the maximum amount that can be contributed to your HSA for 2019 before considering employer contributions and qualified funding distributions.
Step 10: Account for Employer and Other Contributions
On line 9, report all employer HSA contributions for 2019, including those made through a cafeteria plan. These amounts should appear in Box 12 of your Form W-2 with code W. On line 10, enter any qualified HSA funding distributions (direct trustee-to-trustee transfers from your traditional IRA or Roth IRA to your HSA). Add lines 9 and 10, entering the total on line 11.
Step 11: Calculate Your Deductible Personal Contribution
Subtract line 11 from line 8 and enter the result on line 12. If zero or negative, enter zero. This information represents the maximum deductible amount for personal contributions you made.
Step 12: Claim Your HSA Deduction
On line 13, enter the smaller of line 2 (your actual contributions) or line 12 (your deduction limit). Carry this amount to Schedule 1 (Form 1040 or 1040-SR), line 12, or Form 1040-NR, line 25. This number is your allowable HSA deduction for 2019.
Step 13: Report Total HSA Distributions
On line 14a, report all HSA distributions you received in 2019 from all HSAs. Include distributions paid with HSA debit cards and withdrawals by authorized individuals.
Step 14: Exclude Rollovers and Timely Excess Withdrawals
On line 14b, subtract any amounts from line 14a that were rolled over to another HSA or were excess contributions (with earnings) withdrawn by your return due date. Subtract line 14b from line 14a and then enter the result on line 14c.
Step 15: Determine Qualified Medical Expenses and Tax Consequences
On line 15, enter qualified medical expenses paid using 2019 HSA distributions. Only include unreimbursed expenses incurred after your HSA was established. Calculate taxable distributions on line 16 by subtracting line 15 from line 14c. Report this amount on Schedule 1 (Form 1040 or 1040-SR), line 8, or Form 1040-NR, line 21, labeled “HSA.” If line 16 has an amount and no exception applies (death, disability, or age 65 or older), calculate the additional 20% penalty tax on line 17b and report it on Schedule 2 (Form 1040 or 1040-SR), line 8, or Form 1040-NR, line 60.
Key 2019 Updates and Important Information
Contribution Limits and Increases
The 2019 HSA contribution limits increased from 2018 levels due to inflation adjustments. Self-only coverage increased from $3,450 to $3,500 (a $50 increase), and family coverage increased from $6,900 to $7,000 (a $100 increase). The catch-up contribution for individuals age 55 or older remains $1,000 and is not subject to monthly proration for unmarried individuals or those with self-only coverage.
Qualified Medical Expenses
Qualified medical expenses for HSA purposes are generally unreimbursed medical expenses that could otherwise be deducted on Schedule A. Only prescribed medicines or drugs (including over-the-counter medications that are prescribed) and insulin (even without a prescription) qualify. Expenses must be incurred after you establish your HSA. You cannot include HSA distributions on Schedule A as itemized medical expense deductions.
Insurance Premium Exceptions
You generally cannot treat insurance premiums as qualified medical expenses unless they are for long-term care insurance, health care continuation coverage (such as COBRA), health care coverage while receiving unemployment compensation, or Medicare and other coverage if you are age 65 or older (excluding Medicare supplemental policies like Medigap).
Additional Tax Exceptions
The 20% additional tax on non-qualified distributions does not apply if distributions are made after you die, become disabled, or turn age 65. Check the box on line 17a if any exception applies to distributions included on line 16.
Testing Period Requirements
If you use the last-month rule (considered an eligible individual for the entire year based on December 1 status) or make a qualified HSA funding distribution, you must remain an eligible individual during the testing period. For the last-month rule, the testing period runs from December 1, 2019, through December 31, 2020. Failure to maintain eligibility results in income inclusion and a 10% additional tax, reportable in Part III of Form 8889.
Excess Contributions
If line 2 exceeds line 13, you contributed more than allowed and may owe an additional tax. You can avoid this tax by withdrawing excess contributions (and their earnings) by your return due date, including extensions. Include the earnings as “Other income” on your tax return for the year withdrawn. Use Form 5329 to calculate the additional tax on any excess contributions remaining in your HSA.
Married Couples with Separate HSAs
If married filing jointly and both spouses have separate HSAs, complete separate Forms 8889 for each spouse. Combine the line 13 amounts from both forms and enter the total on Schedule 1 (Form 1040 or 1040-SR), line 12, or Form 1040-NR, line 25. Attach both completed Forms 8889 to your paper tax return.
High Deductible Health Plan Requirements
For 2019, an HDHP must have a minimum annual deductible of $1,350 for self-only coverage or $2,700 for family coverage. Maximum annual out-of-pocket expenses cannot exceed $6,750 for self-only coverage or $13,500 for family coverage. These limits do not apply to out-of-network services if the plan uses a provider network.
Other Coverage Restrictions
If you have an HSA, you generally cannot have any health coverage apart from an HDHP. Exceptions include coverage for accidents, disability, dental care, vision care, long-term care, and certain preventive care benefits. You can also have insurance for specific diseases, fixed hospitalization amounts, or benefits for workers’ compensation and tort liabilities.
Rollovers and Transfers
You can make a tax-free rollover from one HSA to another (or from an Archer MSA to an HSA) within 12 months. The rollover must be completed within 60 days of receiving the distribution. Direct trustee-to-trustee transfers between HSAs are not considered rollovers, are not taxable, and have no frequency limitation.
Important Documentation
Keep Form 1099-SA (showing HSA distributions) and Form 5498-SA (showing HSA contributions) with your tax records. Maintain receipts and documentation for all qualified medical expenses paid with HSA distributions. These records support the amounts reported on Form 8889 and may be required if the IRS examines your return.
Additional Resources
For comprehensive information about HSAs, HDHPs, qualified medical expenses, and detailed examples, refer to IRS Publication 969 (Health Savings Accounts and Other Tax-Favored Health Plans). The publication guides eligibility requirements, contribution calculations, distribution rules, and special situations, including divorce, death of the account beneficiary, and coordination with Medicare enrollment.
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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.
