U.S. Individual Income Tax Return

2018

Department of the Treasury
Internal Revenue Service

Instructions for Form 8889
Health Savings Accounts (HSAs)
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments
For the latest information about
developments related to Form 8889 and
its instructions, such as legislation
enacted after they were published, go to
IRS.gov/Form8889.

What’s New

Rev. Proc. 2017-37, 2017-21 I.R.B.
1252, initially provided that the
maximum contribution amount for an
individual with family HDHP coverage
was $6,900. In response to the Tax Cuts
and Jobs Act, a lower maximum
contribution, $6,850, was issued under
Rev. Proc. 2018-18, 2018-10 I.R.B. 392.
Subsequently, in the interest of sound
and efficient tax administration, Rev.
Proc. 2018-27, 2018-20 I.R.B. 591,
allows taxpayers to treat $6,900 as the
maximum HSA contribution for family
HDHP coverage. If you received a
distribution of an excess contribution
based on the $6,850 limit, see Rev.
Proc. 2018-27 at IRS.gov/irb/
2018-20_IRB#RP-2018-27 regarding
the tax treatment of the distribution.

General Instructions
Purpose of Form

Use Form 8889 to:

• Report health savings account (HSA)
contributions (including those made on
your behalf and employer contributions),
• Figure your HSA deduction,
• Report distributions from HSAs, and
• Figure amounts you must include in
income and additional tax you may owe
if you fail to be an eligible individual.
Additional information. See Pub.
969, Health Savings Accounts and
Other Tax-Favored Health Plans, for
more details on HSAs. Also, see
Instructions for Form 1040 and
Instructions for Form 1040NR.

Who Must File

You must file Form 8889 if any of the
following applies.
• You (or someone on your behalf,
including your employer) made
contributions for 2018 to your HSA.
Sep 27, 2018

• You received HSA distributions in
2018.
• You must include certain amounts in
income because you failed to be an
eligible individual during the testing
period.
• You acquired an interest in an HSA
because of the death of the account
beneficiary. See Death of Account
Beneficiary, later.
If you (or your spouse, if filing
jointly) received HSA
CAUTION distributions in 2018, you must
file Form 8889 with Form 1040 or Form
1040NR even if you have no taxable
income or any other reason for filing
Form 1040 or Form 1040NR.

!

Definitions
Eligible Individual

To be eligible to have contributions
made to your HSA, you must be
covered under a high deductible health
plan (HDHP) and have no other health
coverage except permitted coverage. If
you are an eligible individual, anyone
can contribute to your HSA. However,
you cannot be enrolled in Medicare or
be another person's dependent. An
individual doesn't fail to be treated as an
eligible individual for any period merely
because the individual receives hospital
care or medical services under any law
administered by the Secretary of
Veterans Affairs for a service-connected
disability. You must be, or be
considered, an eligible individual on the
first day of a month to take an HSA
deduction for that month (see
Last-month rule next).
Last-month rule. If you are an eligible
individual on the first day of the last
month of your tax year (December 1 for
most taxpayers), you are considered to
be an eligible individual for the entire
year.
Testing period. You must remain
an eligible individual during the testing
period. The testing period begins with
the last month of your tax year and ends
on the last day of the 12th month
following that month (for example,
December 1, 2018 – December 31,
2019). If you fail to remain an eligible
individual during this period, other than
Cat. No. 37971Y

because of death or becoming disabled,
you will have to include in income the
total contributions made that would not
have been made except for the
last-month rule. You include this amount
in income in the year in which you fail to
be an eligible individual. This amount is
also subject to a 10% additional tax.
(See Part III.)

Account Beneficiary
The account beneficiary is the individual
on whose behalf the HSA was
established.

HSA
Generally, an HSA is a health savings
account set up exclusively for paying
the qualified medical expenses of the
account beneficiary or the account
beneficiary's spouse or dependents.

Distributions From an HSA
Distributions from an HSA used
exclusively to pay qualified medical
expenses of the account beneficiary,
spouse, or dependents are excludable
from gross income. (See the Line 15
instructions for information on medical
expenses of dependents not claimed on
your return.) You can receive
distributions from an HSA even if you
are not currently eligible to have
contributions made to the HSA.
However, any part of a distribution not
used to pay qualified medical expenses
is includible in gross income and is
subject to an additional 20% tax unless
an exception applies.

Qualified Medical Expenses
Generally, qualified medical expenses
for HSA purposes are unreimbursed
medical expenses that could otherwise
be deducted on Schedule A (Form
1040). See the Instructions for
Schedule A and Pub. 502, Medical and
Dental Expenses. Expenses incurred
before you establish your HSA are not
qualified medical expenses. If, under
the last-month rule, you are considered
to be an eligible individual for the entire
year for determining the contribution
amount, only those expenses incurred

after you actually establish your HSA
are qualified medical expenses.
Note. Only prescribed medicines or
drugs (including over-the-counter
medicines and drugs that are
prescribed) and insulin (even if
purchased without a prescription) for the
account beneficiary, the account
beneficiary's spouse or dependent(s),
are qualified medical expenses.
You cannot treat insurance premiums
as qualified medical expenses unless
the premiums are for:
1. Long-term care (LTC) insurance,
2. Health care continuation
coverage (such as coverage under
COBRA),
3. Health care coverage while
receiving unemployment compensation
under federal or state law, or
4. Medicare and other health care
coverage if you were 65 or older (other
than premiums for a Medicare
supplemental policy, such as Medigap).
Coverage under (2) and (3) can

TIP be for your spouse or a

dependent meeting the
requirement. For (4), if you, the account
beneficiary, are under age 65, Medicare
premiums for your spouse or
dependents (who are age 65 or older)
generally are not qualified medical
expenses.

High Deductible Health Plan
An HDHP is a health plan that meets the
following requirements.
Self-only
coverage

Family
coverage

Minimum annual
deductible

$1,350

$2,700

Maximum annual
out-of-pocket
expenses*

$6,650

$13,300

* This limit does not apply to deductibles and
expenses for out-of-network services if the plan
uses a network of providers. Instead, only
deductibles and out-of-pocket expenses (such
as copayments and other amounts, but not
premiums) for services within the network
should be used to figure whether the limit is
reached.

An HDHP can provide preventive
care and certain other benefits with no
deductible or a deductible below the
minimum annual deductible. For more

details, see Pub. 969. An HDHP does
not include a plan if substantially all of
the coverage is for accidents, disability,
dental care, vision care, or long-term
care. See Other Health Coverage next.

Other Health Coverage
If you have an HSA, you (and your
spouse, if you have family coverage)
generally cannot have any health
coverage other than an HDHP. Your
spouse can have health coverage that is
non-HDHP provided you are not
covered by that plan. If you have a
health flexible spending arrangement or
health reimbursement arrangement, see
Pub. 969.
Exceptions. You can have additional
insurance that provides benefits only
for:
• Liabilities under workers'
compensation laws, tort liabilities, or
liabilities arising from the ownership or
use of property;
• A specific disease or illness; or
• A fixed amount per day (or other
period) of hospitalization.
You also can have coverage (either
through insurance or otherwise) for
accidents, disability, dental care, vision
care, or long-term care.
For information on prescription drug
plans, see Pub. 969.

Disabled
An individual generally is considered
disabled if he or she is unable to engage
in any substantial gainful activity due to
a physical or mental impairment which
can be expected to result in death or to
continue indefinitely.

Death of Account Beneficiary
If the account beneficiary's surviving
spouse is the designated beneficiary,
the HSA is treated as if the surviving
spouse were the account beneficiary.
The surviving spouse completes Form
8889 as though the HSA belonged to
him or her.
If the designated beneficiary is not
the account beneficiary's surviving
spouse, or there is no designated
beneficiary, the account ceases to be
an HSA as of the date of death. The
beneficiary completes Form 8889 as
follows.
• Enter “Death of HSA account
beneficiary” across the top of Form
8889.
• Enter the name(s) shown on the
beneficiary's tax return and the
beneficiary's SSN in the spaces
-2-

provided at the top of the form and skip
Part I.
• On Part II, line 14a, enter the fair
market value of the HSA as of the date
of death.
• On Part II, line 15, for a beneficiary
other than the estate, enter qualified
medical expenses incurred by the
account beneficiary before the date of
death that the beneficiary paid within 1
year after the date of death.
• Complete the rest of Part II.
If the account beneficiary's estate is
the beneficiary, the value of the HSA as
of the date of death is included on the
account beneficiary's final income tax
return. Complete Form 8889 as
described above, except you should
complete Part I, if applicable.
The distribution is not subject to the
additional 20% tax. Report any earnings
on the account after the date of death as
income on your tax return.
Note. If, during the tax year, you are the
beneficiary of two or more HSAs or you
are a beneficiary of an HSA and you
have your own HSA, you must complete
a separate Form 8889 for each HSA.
Enter “statement” at the top of each
Form 8889 and complete the form as
instructed. Next, complete a controlling
Form 8889, combining the amounts
shown on each of the statement Forms
8889. Attach the statements to your
paper tax return after the controlling
Form 8889.

Deemed Distributions From HSAs
The following situations result in
deemed distributions from your HSA.
• You engaged in any transaction
prohibited by section 4975 with respect
to any of your HSAs, at any time in
2018. Your account ceases to be an
HSA as of January 1, 2018, and you
must include the fair market value of all
assets in the account as of January 1,
2018, on line 14a.
• You used any portion of any of your
HSAs as security for a loan at any time
in 2018. You must include the fair
market value of the assets used as
security for the loan as income on
line 21 of Schedule 1 (Form 1040) or
Form 1040NR.
Any deemed distribution will not be
treated as used to pay qualified medical
expenses. Generally, these distributions
are subject to the additional 20% tax.

Form 8889 (2018)

Rollovers
A rollover is a tax-free distribution
(withdrawal) of assets from one HSA or
Archer MSA that is reinvested in
another HSA of the same account
beneficiary. Generally, you must
complete the rollover within 60 days
after you received the distribution. An
HSA can only receive one rollover
contribution during a 1-year period. See
Pub. 590-A, Contributions to Individual
Retirement Arrangements (IRAs), for
more details and additional
requirements regarding rollovers.
Note. If you instruct the trustee of your
HSA to transfer funds directly to the
trustee of another of your HSAs, the
transfer is not considered a rollover.
There is no limit on the number of these
transfers. Do not include the amount
transferred in income, deduct it as a
contribution, or include it as a
distribution on line 14a.

Specific Instructions
Name and social security number
(SSN). Enter your name(s) as shown
on your tax return and the SSN of the
HSA account beneficiary. If married
filing jointly and both you and your
spouse have HSAs, complete a
separate Form 8889 for each of you.

Part I—HSA Contributions
and Deductions

Use Part I to figure:
• Your HSA deduction,
• Any excess contributions you made
(or those made on your behalf), and
• Any excess contributions made by an
employer (see Excess Employer
Contributions, later).

Figuring Your HSA Deduction

The maximum amount that can be
contributed to your HSA depends on the
type of HDHP coverage you have. If you
have self-only coverage, your maximum
contribution is $3,450. If you have family
coverage, your maximum contribution is
$6,900.
Note. If you are age 55 or older at the
end of your tax year, you can make an
additional contribution of $1,000.
Your maximum contribution is
reduced by any employer contributions
to your HSA, any contributions made to
your Archer MSA, and any qualified
HSA funding distributions.
You can make deductible
contributions to your HSA even if your
employer made contributions. However,
Form 8889 (2018)

if you (or someone on your behalf)
made contributions in addition to any
employer contributions and qualified
HSA funding distributions, you may
have to pay an additional tax. See
Excess Contributions You Make, later.
You cannot deduct any contributions
for any month in which you were
enrolled in Medicare. Also, you cannot
deduct contributions if you are someone
else's dependent for 2018.

How To Complete Part I

Complete lines 1 through 13 as
instructed on the form. However, if you,
and your spouse if filing jointly, are both
eligible individuals and either of you has
an HDHP with family coverage, you
both are treated as having only the
family coverage plan. Disregard any
plans with self-only coverage.
Complete a separate Form 8889 for
each spouse. Combine the amounts on
line 13 of both Forms 8889 and enter
this amount on Schedule 1 (Form 1040),
line 25; or Form 1040NR, line 25. Be
sure to attach both Forms 8889 to your
paper tax return.

Line 1

If you were covered, or considered
covered, by a self-only HDHP and a
family HDHP at different times during
the year, check the box for the plan that
was in effect for a longer period. If you
were covered by both a self-only HDHP
and a family HDHP at the same time,
you are treated as having family
coverage during that period. If, on the
first day of the last month of your tax
year, December 1 for most taxpayers,
you had family coverage, check the
“family” box.

Line 2

Include on line 2 only those amounts
you, or others on your behalf,
contributed to your HSA in 2018. Also,
include those contributions made from
January 1, 2019, through April 15, 2019,
that were for 2018. Do not include
employer contributions (see line 9) or
amounts rolled over from another HSA
or Archer MSA. See Rollovers, earlier.
Also, do not include any qualified HSA
funding distributions (see line 10).
Contributions to an employee's account
through a cafeteria plan are treated as
employer contributions and are not
included on line 2.

Line 3

When figuring the amount to enter on
line 3, apply the following rules.
1. Use the family coverage amount
if you or your spouse had an HDHP with
-3-

family coverage. Disregard any plan
with self-only coverage.
2. If the last-month rule (see
Last-month rule, earlier) applies, you
are considered an eligible individual for
the entire year. You are treated as
having the same HDHP coverage for
the entire year as you had on the first
day of the last month of your tax year.
3. If you were, or were considered,
an eligible individual for the entire year
and you did not change your type of
coverage, enter $3,450 for a self-only
HDHP or $6,900 for a family HDHP on
line 3. (See (6) in this list.)
4. If you were, or were considered,
an eligible individual for the entire year
and you changed your type of coverage
during the year, enter on line 3 (see (6)
in this list) the greater of:
a. The limitation shown on the last
line of the Line 3 Limitation Chart and
Worksheet (in these instructions), or
b. The maximum amount that can
be contributed based on the type of
HDHP coverage you had on the first day
of the last month of your tax year.
If you had family coverage on

TIP the first day of the last month,

you do not need to use the
worksheet; enter $6,900 on line 3.

5. If you were not an eligible
individual on the first day of the last
month of your tax year, use the Line 3
Limitation Chart and Worksheet (in
these instructions) to determine the
amount to enter on line 3. (See (6) in
this list.)
6. If, at the end of 2018, you were
age 55 or older and unmarried or
married with self-only HDHP coverage
for the entire year, you can increase the
amount determined in (3) or (4) by
$1,000 (the additional contribution
amount). For (5), the additional
contribution amount is taken into
account for each month you are an
eligible individual.
Note. If you are married and had family
coverage at any time during the year,
the additional contribution amount is
figured on line 7 and is not included on
line 3.
See Pub. 969 for more information.
If you must complete the Line 3

TIP Limitation Chart and Worksheet

(in these instructions), and your
eligibility and coverage did not change
from one month to the next, enter the
same number you entered for the
previous month.

Line 6

Spouses who have separate HSAs and
had family coverage under an HDHP at
any time during 2018, use the following
rules to figure the amount on line 6.
• If you are treated as having family
coverage for each month, divide the
amount on line 5 equally between you
and your spouse, unless you both agree
on a different allocation (such as
allocating nothing to one spouse). Enter
your allocable share on line 6.
Example. In 2018, you are an
eligible individual and have self-only
HDHP coverage. In March you marry
and as of April 1 you have family HDHP
coverage. Neither you nor your spouse
qualify for the additional contribution
amount. Your spouse has a separate
HSA and is an eligible individual from
April 1 to December 31, 2018. Because
you and your spouse are considered to
have family coverage on December 1,
your contribution limit is $6,900 (the
family coverage maximum). You and
your spouse can divide this amount in
any allocation to which you agree (such
as allocating nothing to one spouse).
• If you are not treated as having family
coverage for each month, use the
following steps to determine the amount
to enter on line 6.
Step 1. Refigure the contribution
limit that would have been entered on
line 5 if you had entered on line 3 the
total of the worksheet amounts only for
the months you were treated as having
family coverage. When refiguring line 5,
use the same amount you previously
entered on line 4.
Step 2. Divide the refigured
contribution limit from Step 1 equally
between you and your spouse, unless
you both agree on a different allocation
(such as allocating nothing to one
spouse).
Step 3. Subtract the part of the
contribution limit allocated to your
spouse in Step 2 from the amount
determined in Step 1.

for the entire year. The contribution limit
for the 3 months you both were
considered to have family coverage is
$1,725 ($6,900 × 3 ÷ 12). You and your
ex-spouse decide to divide the family
coverage contribution in the following
manner: 75% to your ex-spouse and
25% to you. Your contribution limit for 9

months of self-only coverage is
$2,587.50 ($3,450 × 9 ÷ 12). This
amount is not divided between you and
your spouse.
Because you are covered under a
self-only policy on December 1, you will
show $3,450 on line 6 (the greater of

Line 3 Limitation Chart and Worksheet
Before you begin: See the instructions for line 3, earlier.
Go through this chart for each month of 2018.
(Keep for your records)

Start Here
Were you enrolled in Medicare for the
month?

Yes

No
Were you an eligible individual (see
Eligible Individual, earlier) on the first
day of the month (see the line 3
instructions, earlier)?

No

Enter -0- on the line
below for the month.

Yes
What type of coverage did your HDHP provide on the first
day of the month?

Self-only coverage
Enter $3,450 on the line below for the
month. If you were age 55 or older at the
end of 2018, enter $4,450 for the month.

Family coverage
Enter $6,900 on the line below for the
month. If, at the end of 2018, you were
unmarried and age 55 or older, enter
$7,900 for the month.

Amount from
chart above

Month in 2018
January
February
March
April
May

Step 4. Determine any other
contribution limits that apply for the tax
year and add that amount to the result in
Step 3. Enter the total on line 6.

June

Example. In 2018, you are an
eligible individual and have family
HDHP coverage. In March you divorce
and change your coverage as of April 1
to self-only. Neither you nor your
ex-spouse qualify for the additional
contribution amount. Your ex-spouse
continued to have family HDHP
coverage and was an eligible individual

September

July
August

October
November
December
Total for all months

Limitation. Divide the total by 12. Enter here and on line 3

-4-

Form 8889 (2018)

Employer Contribution Worksheet

Keep for Your Records

1. Enter the employer contributions reported in box 12 of Form W-2, with code W . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2. Enter employer contributions made in 2018 for tax year 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.

3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Enter employer contributions made in 2019 for tax year 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Employer contributions for 2018. Add lines 3 and 4. Enter here and on Form 8889, line 9 . . . . . . . . . . . . . . . .

5.

either (a) $3,018.75 ($1,725 family
coverage + $2,587.50 self-only
coverage – $1,293.75 spousal
allocation) or (b) the maximum amount
that can be contributed ($3,450 for
self-only coverage)). Your ex-spouse
would show $6,900 on line 6 (the
greater of either (a) $6,468.75 ($1,725
family coverage for the 3 months prior to
the divorce + $5,175 family coverage
maintained after the divorce – $431.25
spousal allocation) or (b) the maximum
amount that can be contributed ($6,900
for family coverage)).

Line 7
Additional Contribution Amount
If, at the end of 2018, you were age 55
or older and married, use the Additional
Contribution Amount Worksheet (in
these instructions) if both of the
following apply.
1. You or your spouse had family
coverage under an HDHP and were, or
were considered to be, an eligible
individual on the first day of the month.
2. You were not enrolled in
Medicare for the month.
Enter the result on line 7.
If items (1) and (2) apply to all

TIP months during 2018, enter
$1,000 on line 7.

Additional Contribution Amount
Worksheet
1. $1,000 × number of months
eligible . . . . . . . . . . . . . . . . .
2. Divide line 1 by 12. Enter
here and on line 7 . . . . . . . .

Example. At the end of 2018, you
were age 55 and married. You had
family coverage under an HDHP from
January 1 through June 30, 2018 (6
months). You were not enrolled in
Medicare in 2018. You would enter an
additional contribution amount of $500
on line 7 ($1,000 × 6 ÷ 12).

Form 8889 (2018)

Line 9
Employer Contributions
Employer contributions (including
contributions through a cafeteria plan)
include any amount an employer
contributes to any HSA for you for 2018.
These contributions should be shown in
box 12 of Form W-2 with code W. If
either of the following apply, complete
the Employer Contribution Worksheet.
• Employer contributions for 2017 are
included in the amount reported in
box 12 of Form W-2 with code W.
• Employer contributions for 2018 are
made in 2019.
If your employer made excess
contributions, you may have to report
the excess as income. See Excess
Employer Contributions, later.

Line 10

Enter on line 10 any qualified HSA
funding distribution made during the
year. This is a distribution from your
traditional IRA or Roth IRA to your HSA
in a direct trustee-to-trustee transfer.
This qualified HSA funding distribution
is not included in your income, is not
deductible, and reduces the amount that
can be contributed to your HSA by you
and from other sources (including
employer contributions). This
distribution cannot be made from an
ongoing SEP IRA or SIMPLE IRA. For
this purpose, a SEP IRA or SIMPLE IRA
is ongoing if an employer contribution is
made for the plan year ending with or
within your tax year in which the
distribution would be made.
The maximum amount that can be
excluded from income is based on your
age at the end of the year and your
HDHP coverage (self-only or family) at
the time of the distribution. You can
make only one qualified HSA funding
distribution during your lifetime.
However, if you make the distribution
during a month when you have self-only
HDHP coverage, you can make another
qualified HSA funding distribution in a
later month in that tax year if you
change to family HDHP coverage.
-5-

See the discussions under Line 13
for the treatment of excess
contributions.
See Pub. 969 for more information.
Testing period. You must remain
an eligible individual during the testing
period. The testing period begins with
the month in which the qualified HSA
funding distribution is contributed to the
HSA and ends on the last day of the
12th month following that month. For
example, if the distribution is contributed
on June 16, 2018, the testing period
ends on June 30, 2019. If you fail to
remain an eligible individual during this
period, other than because of death or
becoming disabled, you will have to
include the qualified HSA funding
distribution in income in the year in
which you fail to be an eligible
individual. This amount also is subject to
a 10% additional tax. (See Part III.)

Line 13

If you or someone on your behalf (or
your employer) contributed more to your
HSA than is allowable, you may have to
pay an additional tax on the excess
contributions. Figure the excess
contributions using the following
instructions. See Form 5329, Additional
Taxes on Qualified Plans (Including
IRAs) and Other Tax-Favored Accounts,
to figure the additional tax.

Excess Contributions You Make
To figure your excess contributions
(including those made on your behalf),
subtract your deductible contributions
(line 13) from your actual contributions
(line 2). However, you can withdraw
some or all of your excess contributions
for 2018 and they will be treated as if
they had not been contributed if:
• You make the withdrawal by the due
date, including extensions, of your 2018
tax return (but see the Note under
Excess Employer Contributions, later);
• You do not claim a deduction for the
amount of the withdrawn contributions;
and
• You also withdraw any income
earned on the withdrawn contributions

and include the earnings in “Other
income” on your tax return for the year
you withdraw the contributions and
earnings.

Excess Employer Contributions
Excess employer contributions are the
excess, if any, of your employer's
contributions over your limitation on
line 8. If you made a qualified HSA
funding distribution (line 10) during the
tax year, reduce your limitation (line 8)
by that distribution before you determine
whether you have excess employer
contributions. If the excess was not
included in income on Form W-2, you
must report it as “Other income” on your
tax return. However, you can withdraw
some or all of the excess employer
contributions for 2018 and they will be
treated as if they had not been
contributed if:
• You make the withdrawal by the due
date, including extensions, of your 2018
tax return (but see the following Note);
• You do not claim an exclusion from
income for the amount of the withdrawn
contributions; and
• You also withdraw any income
earned on the withdrawn contributions
and include the earnings in “Other
income” on your tax return for the year
you withdraw the contributions and
earnings.
Note. If you timely filed your return
without withdrawing the excess
contributions, you can still make the
withdrawal no later than 6 months after
the due date of your tax return,
excluding extensions. If you do, file an
amended return with “Filed pursuant to
section 301.9100-2” written at the top.
Include an explanation of the
withdrawal. Make all necessary
changes on the amended return (for
example, if you reported the
contributions as excess contributions on
your original return, include an amended
Form 5329 reflecting that the withdrawn
contributions are no longer treated as
having been contributed).

Deducting an Excess Contribution
in a Later Year
You may be able to deduct excess
contributions for previous years that are
still in your HSA. The excess
contributions you can deduct in the
current year is the lesser of the following
two amounts.
• Your maximum HSA contribution limit
for the year minus any amounts
contributed to your HSA for the year.

• The total excess contributions in your
HSA at the beginning of the year.

parent releases claim to the child as his
or her dependent.

Any excess contribution remaining at
the end of the tax year is subject to the
additional tax. See Form 5329.

You cannot take a deduction on
Schedule A (Form 1040) for any
amount you include on line 15.

Part II—HSA Distributions
Line 14a

Enter the total distributions you received
in 2018 from all HSAs. Your total
distributions include amounts paid with
a debit card that restricts payments to
health care and amounts withdrawn by
other individuals that you have
designated. These amounts should be
shown in box 1 of Form 1099-SA.

Line 14b

Include on line 14b any distributions you
received in 2018 that qualified as a
rollover contribution to another HSA.
See Rollovers, earlier. Also include any
excess contributions (and the earnings
on those excess contributions) included
on line 14a that were withdrawn by the
due date, including extensions, of your
return. See the instructions for line 13,
earlier.

Line 15
Only include on line 15
distributions from your HSA that
CAUTION were used to pay you for
qualified medical expenses (see
Qualified Medical Expenses, earlier) not
reimbursed by insurance or other
coverage and that you incurred after the
HSA was established. Do not include
the distribution of an excess contribution
taken out after the due date, including
extensions, of your return even if used
for qualified medical expenses.

!

In general, include on line 15
distributions from all HSAs in 2018 that
were used for the qualified medical
expenses (see Qualified Medical
Expenses, earlier) of:
1. You and your spouse.
2. All your dependents.
3. Any person who would be a
dependent except that:
a. The person filed a joint return.
b. The person had gross income.
c. You, or your spouse if filing
jointly, are dependents of someone
else.
For this purpose, a child of

TIP parents that are divorced,

separated, or living apart for the
last 6 months of the calendar year is
treated as the dependent of both
parents whether or not the custodial
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!

CAUTION

Lines 17a and 17b
Additional 20% Tax
HSA distributions included in income
(line 16) are subject to an additional
20% tax unless one of the following
exceptions applies.

Exceptions to the Additional 20%
Tax
The additional 20% tax does not apply
to distributions made after the account
beneficiary:
• Dies,
• Becomes disabled (see Disabled,
earlier), or
• Turns age 65.
If any of the exceptions apply to any
of the distributions included on line 16,
check the box on line 17a. Enter on
line 17b only 20% (0.20) of any amount
included on line 16 that does not meet
any of the exceptions.
Example 1. You turned age 63 in
2018 and received a distribution from an
HSA that is included in income. Do not
check the box on line 17a because you
(the account beneficiary) did not meet
the age exception for the distribution.
Enter 20% of the amount from line 16 on
line 17b.
Example 2. You turned age 65 in
2018. You received distributions that are
included in income both before and after
you turned age 65. Check the box on
line 17a because the additional 20% tax
does not apply to the distributions made
after the date you turned age 65.
However, the additional 20% tax does
apply to the distributions made on or
before the date you turned age 65.
Enter on line 17b, 20% of the amount of
these distributions included in line 16.

Part III—Income and
Additional Tax for Failure
To Maintain HDHP
Coverage

Use Part III to figure any income and
additional tax that must be reported on
Schedule 1 (Form 1040) and Schedule
4 (Form 1040) or Form 1040NR for
failure to be an eligible individual during
the testing period for:
• Last-month rule (see Last-month rule,
earlier), or
Form 8889 (2018)

• A qualified HSA funding distribution
(see the Instructions for line 10, earlier).
See the discussion, earlier, on
determining the testing period for both
the last-month rule and a qualified HSA
funding distribution. Include the amount
in income in the year in which you fail to
be an eligible individual.

Form 8889 (2018)

Line 18

You can use the Line 3 Limitation Chart
and Worksheet (in these instructions)
for the year the contribution was made
to determine the contribution you could
have made if the last-month rule did not
apply. Enter on line 18 the excess of the
amount contributed over the

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redetermined amount. Examples of this
computation are in Pub. 969.

Line 19

Enter the total of any qualified HSA
funding distribution (see line 10).