How to Fill Out 2022 Form 8889 for Your HSA

Form 8889 is the tax form used to report Health Savings Account (HSA) activity to the Internal Revenue Service. Anyone who contributes to or takes a distribution from an HSA must file this form with their Form 1040. The form is used to report contributions, calculate your tax deduction, and report distributions to determine if any are taxable. If you and your spouse both have HSAs, you must each file a separate Form 8889.

Information and Documents Needed to Complete Form 8889

To complete Form 8889, you will need specific tax forms from your HSA custodian and employer. Form 5498-SA reports total contributions to your account, while Form 1099-SA shows the total amount you withdrew. Your Form W-2 is also needed, as Box 12 with code W shows employer contributions and your pre-tax payroll deductions.

You must also confirm your health insurance details. To contribute to an HSA, you must be covered by a qualifying high-deductible health plan (HDHP). For 2025, an HDHP for self-only coverage must have a minimum annual deductible of $1,650 and a maximum out-of-pocket expense limit of $8,300. For family coverage, the minimum deductible is $3,300, with a maximum out-of-pocket limit of $16,600.

The HSA contribution limits are another point of reference. For 2025, individuals with self-only HDHP coverage can contribute up to $4,300, while those with family coverage can contribute up to $8,550. Individuals age 55 or older can contribute an additional $1,000 as a catch-up contribution. You will also need records of your qualified medical expenses, which include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease.

Calculating Your HSA Deduction (Part I)

Part I of Form 8889 determines your allowable HSA deduction. You will report your contributions and calculate the maximum amount you can deduct on your tax return. You begin by indicating the type of HDHP coverage you had during the year, either self-only or family. If your coverage type changed, check the box for the coverage you had for the majority of the year.

Line 2 is for reporting HSA contributions you made directly, not including employer contributions or rollovers. On Line 3, you determine your contribution limit. This may require using the “Limitation Chart and Worksheet” in the form’s instructions to calculate a prorated limit if you were not eligible for the entire year.

The worksheet incorporates the “last-month rule,” which allows a full-year contribution if you were eligible on the first day of the last month of the tax year. If you use this rule, you must remain eligible for the entire following year, known as the testing period. Other lines in Part I account for Archer MSA contributions, qualified HSA funding distributions from an IRA, and employer contributions. The final calculation determines your HSA deduction, which is entered on Schedule 1 (Form 1040).

Reporting HSA Distributions (Part II)

Part II of Form 8889 addresses distributions from your HSA to determine if any portion is taxable. You begin by entering the total gross distributions you received during the tax year. This amount is found on your Form 1099-SA.

You must account for any distributions that were rolled over to another HSA, as these are not taxable if completed within 60 days. On Line 15, you enter the total of your qualified medical expenses paid for with the distributed funds. You cannot include expenses that were reimbursed by another source or that occurred before your HSA was established.

The calculation on Line 16 shows the taxable portion of your distributions, which is the amount of withdrawals that exceeded your qualified medical expenses. This amount is reported as “Other income” on your Form 1040. If you have a taxable amount, you may also owe an additional 20% tax. There are exceptions to this additional tax, such as distributions made after you turn 65, become disabled, or die.

Addressing the Last-Month Rule Penalty (Part III)

Part III of Form 8889 applies if you used the last-month rule to make a full-year HSA contribution but did not remain an eligible individual for the entire testing period. The testing period runs through the end of the calendar year following the year you used the rule.

If you failed to maintain HDHP coverage during this period for any reason other than death or disability, you must complete Part III. You must calculate the portion of your contribution that was only deductible because of the last-month rule. This amount must be included in your income for the year you failed the testing period.

In addition to including this amount in your income, you are also subject to a 10% penalty tax on that amount. This penalty is calculated on Line 19.