HSA distributions

[SGS]

I have been completing the 1099-SA with distributions and distribution code 1, and check the box for the distribution being used for medical expenses as always, and Form 8889 shows there is no taxable HSA distribution.  However, the other income on Schedule 1 still populates with the amount of the distribution as taxable income.  What am I missing here?

[qbteachmt]

Was this also a contribution year for that person? Perhaps the value you see is from excess contribution.

[Just-Lisa-Now-]

On the 8889 you need to mark the Family of Self box in the Smart Worksheet below the top line (just marking the box on that top line, doesnt do what you need)  and be sure you DON'T enter any contributions on the 8889 that were made through payroll, those should come from the W2 entry, you dont enter them again anywhere.

[dkh]

The boxes Lisa mentions that need to be checked should've come up when you did an Error check. 

Is this taxpayer a dependent - if yes, they cannot contribute to an HSA without the contribution being taxable and a penalty on F5329.    I had this situation recently.

[qbteachmt]

"Is this taxpayer a dependent - if yes, they cannot contribute to an HSA without the contribution being taxable and a penalty on F5329."

Ooh, that's a new one for me! Is that true even if this dependent has their own HDHP coverage?

[dkh]

IRS doesn't mention any exception if it's the taxpayer's HDHP and not the parents

  https://www.irs.gov/publications/p969#:~:text=If%20another%20taxpayer%20is%20entitled,tax%20years%20....

[SGS]

No contributions other than through payroll deductions, but thanks for your response.

[SGS]

All the boxes were checked correctly.  I think I found the problem.  It looks like the distributions got entered in two different places by mistake, and I missed the second entry in my first review.  Thanks for you response.  It was good to check and make sure the things you mentioned were done correctly.

[SGS]

No dependent issue on this one, but I found the problem as mentioned above.  Thanks for your help.

[SGS]

I think I found the problem. It looks like the distributions got entered in two different places by mistake, and I missed the second entry in my first review.  Thanks for all your suggestions.  I checked each item mentioned to be sure.  Thanks again.