I am older than 60 and contributed X dollars to the health savings account that is an employee benefit.
I used all of the money to pay medical bills.
The HSA contribtution is pre-tax. I filled out a form each time I put money in the HSA. This form directed my employer made a pre-tax deduction from my paycheck to put the money in the HSA.
The amount that I put in the HSA is not included in the wages on the W-2 because it was pre-tax.
I received Form 1099-SA from the Health Savings Account. It lists an amount as a "gross distribution" in box #1.
The distribution code in box 3 is 1.
I do not know what to do with this form and whether I need to fill out IRS Form 8889.
On form 8889 -
Box 2 asks for the amount of contributions made. Do I fill in the amount that was contributed pre-tax or does this only apply if the contributions weren't pre-tax?
Item 7 asks something about HDHP for people older than 55. I assume this means High Deductible Health Plan. So I entered my premium payments for the year.
My amount on line 8 is Z.
Item 10 asks for qualified distributions. I don't know what that means.
If I put the amount from Form 1099-SA, I get Y.
My amount on line 10 is Y, which is greater than X. Maybe that is because interest was earned on X, so I could spend Y on the medical bills.
If I subtract line 11 from line 8 I get a negative number, so I list zero according to the instructions.
Line 13 is the smaller of lines 2 and 12, so it is 0.
Then there is a caution statement that says that if line 2 is greater than line 13, tax may be due.
I thought the purpose of the pre-tax contribution was that it is not taxable.
Then in Part II they ask for the total distributions. Then they ask for unreimbursed qualified medical expenses. So I have amount Y for lines 14a, 14c and 15.
Is everything filled out right?
Thanks for the help.