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How do I report HSA activity on my tax return?

how to file hsa on tax return

The IRS has stated that HSA contributions and distributions are reportable transactions.


Employer HSA contributions are reported on the W-2 for each employee that received a contribution. It is reported on the W-2 as non-taxable wages.

Regardless of whether HSA contributions are made by the account holder or the employer, these contributions must be reported on the individual tax return of the account holder. Contributions to and distributions from HSAs are reported by the account holder on Form 8889 and attached to Form 1040.


Distributions from HSAs, if for qualified medical expenses, will avoid income tax consequences to the recipient. For this reason, the IRS requires the reporting of these distributions.

The account holder will receive Form 1099-SA reporting distributions made during the tax year and Form 5498-SA reporting contributions made to the HSA during the tax year. 1099-SAs are sent by January 31st. 5498-SA are sent in May, after the April 15th tax filing deadline. It is the account holder's responsibility to keep records to support distributions and to complete Form 8889 and attach it to Form 1040.

The account holder is responsible to report the contributions and distributions to the IRS and is ultimately responsible for ensuring that account transactions are within the allowed regulations. If an error is made by Discovery Benefits or its custodian, Discovery Benefits would be responsible for that activity.

Category: Taxes

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