HSA and 1099-SA

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  • #3175
    b1_lee
    Participant

    I am helping my son to file his return because he is out of town and I have no personal experience with HSA.

    HSA Bank, a division of a not well known bank in Wisconsin) send 1099-SA:-

    Box 1 Gross distribution $xxx.xx
    Box 2 Earnings on excess contributions $0.00
    Box 3 Distribution code 1 (Normal distribution)
    Box 4 FMV on date of death $0.00
    Box 5 Account type HSA

    His W-2, Box 12c has $3450 code W (Employer contribution)

    Questions:-
    -Since Box 2 is 0 and all his distribution are eligible medical expense, is he require to file Form 8889 (Part 1 and/or Part 2)?

    -If so, does he have to enter $0 on Sch 1, Line 21 (other income) & write “HSA”? Enter $0 on Sch 1, Line 25 (HSA deduction-attach Form 8889)?

    -Since Box 4 of 1099-SA is $0, that mean he didn’t contribute any $ toward HSA-only his employer did? How Box 4 would be > $0?

    -If Box 4 of 1099-SA is > $0, that mean he made contribution and earned some interest?

    -Since Box 1 of 1099-SA is less than $3450, what happened to ($3450-$xxx.xx)? Is it use it or lose it within the same tax year?

    -Is part of $3450 paid some sort of high deductible insurance premium? How much of that $3450 is available to pay for eligible medical expense distribution? What happen to employee’s high medical expense year (> $3450)? Employee pay out of his pocket?

    -I heard people make contribution to HSA (a different variation of HSA?) get triple tax benefit (deduct up-front, tax free earning & withdraw tax free when use to pay eligible medical expense) + they can invest in stock/mutual fund/ETF, etc. instead earning low fixed interest. Is it inside employer’s HSA or outside employer’s HSA? Is employer require to offer if requested/prefer by employee?

    #3176
    kaneohe
    Participant

    “Box 4 FMV on date of death $0.00

    -Since Box 4 of 1099-SA is $0, that mean he didn’t contribute any $ toward HSA-only his employer did? How Box 4 would be > $0?

    -If Box 4 of 1099-SA is > $0, that mean he made contribution and earned some interest?”

    Box 4 of 1099-SA = 0 means son is alive. Perhaps n/a (not applicable) would have been a more suitable input than 0.

    • This reply was modified 2 years, 5 months ago by kaneohe.
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