Generating

In order for Form 8889 to be generated, an entry needs to be made on the W2 screen and/or screen 8889.

If using screen W2 enter the HSA contribution on line 12, code W. This generates Form 8889 in view mode with Self-only marked on line 1. Additional entries may be needed on screen 8889 in some cases.

If using screen 8889, check the box for either Taxpayer only or Family on screen 8889. Then enter the HSA contribution amount on line 2 (do not include any amount entered on screen W2, box 12, code W).

The total distributions from Form 1099-SA may be entered on the 8889 screen, line 14a.

Be sure to enter qualified medical expenses on line 15 that would not be included in the taxable amount distributed.

EF Message 5288

This message is generated if you have keyed two 8889 screens for the same taxpayer on the return. You can transmit only one Form 8889, Health Savings Account, per taxpayer.

• For a single filer, one form is allowed.

• For an MFJ return, two forms are allowed, one for each taxpayer.

• For a MFS return, one form is allowed, for the primary taxpayer.

MFJ HSA Deduction

In a joint return where both spouses have an HSA, one spouse has family coverage and the other self-only coverage, you must decide how to split the deduction. Drake Tax does not make that calculation.

Line 6 of Form 8889 is a component of the HSA deduction that appears on line 13. Line 6 is the amount on line 5 unless the taxpayer and their spouse have separate HSAs and had family coverage under an HDHP at any time during the year.

In that event,

• The amount on line 6 for the spouse with family coverage is the total line 6 amount for both spouses and may be divided between them as they may agree.

• No additional line 6 amount is available to the self-only spouse.

Allocate the split with the override fields for line 6 on the 8889 screen for each spouse. See Help for field 6 on screen 8889 (press F1) and also the instructions for line 6 in the Form 8889 Instructions.

Distribution Showing as Income

Verify that qualified medical expenses were entered on line 15 of Form 8889. Generally, any part of an HSA (Health Savings Account) distribution not used to pay qualified medical expenses are included in gross income and subject to an additional 20% tax (unless an exception applies).

For more details, see

• Form 8889 Instructions

• Publication 969

HSA Deduction - Over 55

On Form 8889, review line 13 instructions. Line 13 is the lesser of the taxpayer's total HSA contribution on line 2 and the allowed contribution on line 12. The line 12 calculation requires an entry on line 7 for the taxpayer.

On screen 8889,

• Enter the full HSA contribution on line 2, including any contributions in excess of the $6,550 limit. (If you enter an amount in the line 3 override field, see the line 3 instructions in the Form 8889 Instructions. That amount should not include the additional contribution for a taxpayer over 55.)

• Enter only that part of the additional $1,000 HSA contribution allowed to a taxpayer over 55 on line 7.

See line 7 in the Form 8889 Instructions for details.