Form 8889 (2022) – Health Savings Accounts Checklist
Purpose
Form 8889 reports HSA contributions, distributions, and qualified medical expenses for the 2022 tax year. This form is required for all HSA beneficiaries who received contributions, took distributions, or are subject to penalties for failure to maintain HDHP coverage. The 2022 contribution limits are $3,650 for self-only coverage and $7,300 for family coverage, with an additional $1,000 catch-up contribution available for individuals age 55 or older.
Eligibility Requirements
To contribute to an HSA, you must be covered under a high-deductible health plan and cannot be enrolled in Medicare or claimed as another person’s dependent. For 2022, an HDHP must have a minimum annual deductible of $1,400 for self-only coverage or $2,800 for family coverage. Maximum out-of-pocket expenses cannot exceed $7,050 for self-only or $14,100 for family coverage.
Step-by-Step Compliance Checklist
Step 1: Verify HDHP Coverage Status
Confirm your HDHP eligibility for each month of 2022. If your coverage changed during the year, document the specific months and the type of coverage. Use the Line 3 Limitation Chart and Worksheet from the IRS instructions to calculate prorated contribution limits if you did not maintain the same coverage type for all twelve months.
Step 2: Determine Coverage Type
Check the appropriate box on line 1 indicating whether you had self-only or family HDHP coverage. If you had both types at different times, select the coverage that was in effect for the longer period. When both self-only and family coverage existed simultaneously, you were treated as having family coverage during that period.
Step 3: Report Personal Contributions
Enter on line 2 all HSA contributions you made directly, including those made by others on your behalf. Include contributions made through the unextended tax filing deadline (April 18, 2023, for most filers) that were designated for 2022. Do not include employer contributions, cafeteria plan contributions, or rollover amounts on this line.
Step 4: Calculate Your Contribution Limit
On line 3, enter your maximum contribution limit based on your coverage type and eligibility. If you maintained the same coverage throughout the year and were eligible every month, enter $3,650 for self-only coverage or $7,300 for family coverage. If your eligibility or coverage changed, complete the Line 3 Limitation Chart and Worksheet to determine the correct prorated amount.
Step 5: Adjust for Archer MSA Contributions
Subtract any Archer MSA contributions from line 4. If you or your spouse had family HDHP coverage at any time during 2022, include Archer MSA contributions made to either spouse’s account.
Step 6: Apply Family Coverage Allocation Rules
If both spouses have separate HSAs and either spouse had family HDHP coverage during 2022, divide the contribution limit for family coverage between spouses. You may allocate the total amount in any manner you both agree upon, including allocating nothing to one spouse. Enter your allocated share on line 6.
Step 7: Add Catch-Up Contributions
If you were age 55 or older on December 31, 2022, you may contribute an additional $1,000. For married individuals with family coverage, use line 7 to calculate the catch-up amount if you did not maintain family coverage all year. For single filers or those with self-only coverage throughout the year, the catch-up amount is already included in the line 3 calculations.
Step 8: Account for Employer Contributions
Enter employer contributions on line 9, including amounts contributed through cafeteria plans. These amounts appear in Box 12 of your Form W-2, labeled as code W. Add any qualified HSA funding distributions from IRAs on line 10. These reduce the amount you can personally contribute.
Step 9: Calculate Your Allowable Deduction
Your HSA deduction on line 13 is the smaller of your actual contributions (line 2) or your contribution limit after adjustments (line 12). If line 2 exceeds line 13, you have made excess contributions that may be subject to a 6% excise tax unless withdrawn by your tax filing deadline.
Step 10: Report Total Distributions
In Part II, enter on line 14a all HSA distributions you received in 2022 from all HSAs. Subtract on line 14b any amounts rolled over to another HSA and any excess contributions withdrawn by your return deadline. The remaining amount on line 14c represents distributions subject to income tax if not used for qualified medical expenses.
Step 11: Document Qualified Medical Expenses
On line 15, enter only distributions used to pay qualified medical expenses that were incurred after your HSA was established, not reimbursed by insurance, and not deducted elsewhere on your return. Retain receipts and documentation as required by IRS substantiation rules. Do not include insurance premiums unless they qualify under specific exceptions.
Step 12: Calculate Taxable Distributions and Penalties
Subtract line 15 from line 14c to determine taxable distributions on line 16. This amount must be included on Schedule 1 (Form 1040), Part I, line 8f. If these distributions do not qualify for exceptions, calculate the 20% additional tax on line 17b and report this amount on Schedule 2 (Form 1040), Part II, line 17c.
Step 13: Determine Exception Eligibility
The 20% additional tax does not apply if distributions were made after you turned age 65, became disabled, or died. If any exceptions apply, check the box on line 17a. Calculate the 20% penalty only on distributions that do not meet the exception criteria.
Step 14: Address Last-Month Rule Failures
Complete Part III if you used the last-month rule to claim full-year contributions but failed to remain HDHP-eligible during the testing period. The testing period runs from December 1, 2022, through December 31, 2023. Enter on line 18 the excess contributions that would not have been allowed without the last-month rule. This amount is included in income on Schedule 1 (Form 1040), Part I, line 8f.
Step 15: Calculate Testing Period Penalties
Multiply the income amount from line 20 by 10% to determine the additional tax on line 21. Report this amount on Schedule 2 (Form 1040), Part II, line 17d. This penalty applies unless the failure was caused by death or disability. Similar rules apply to qualified HSA funding distributions from IRAs.
Important Reminders
Attach Form 8889 to your Form 1040, 1040-SR, or 1040-NR with your name and Social Security number clearly indicated. Suppose both spouses have HSAs, complete separate Forms 8889 for each spouse, and combine the deduction amounts when entering on Schedule 1, line 13.
Qualified medical expenses include amounts paid for yourself, your spouse, and dependents, even if they are not claimed on your tax return.
Personal protective equipment and COVID-19 testing costs are qualified expenses. Nonprescription medicines, apart from insulin, do not qualify for the medical expense deduction, but they are qualified HSA expenses. HDHPs may provide telehealth and other remote care services with zero deductibles for months beginning after March 31, 2022, and before January 1, 2023, without affecting HSA eligibility.
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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.
