Tax Slayer entry:
Federal Section > Deductions > Adjustments > Health Savings Account (Form 8889)
- Distribution amount is entered on Form 8889 Part II.
- See the HSA resource page for more information.
- Any distributions more than the medical expenses paid will incur a 20% penalty that will appear on Form 1040 line 60 – “Taxes from … HSA”.
- If excess contributions to the plan were made and subsequently removed, any amount in box 2 should be reported as Interest Income.
- If excess contributions to the plan were not removed, the return is OUT OF SCOPE.
- If the HSA owner (may not be the recipient) is deceased, the return is OUT OF SCOPE.