HSA tax center
You get tax savings in three ways with your HSA because:
- The money you put into your HSA is tax deductible.
- Your savings grow income-tax free.
- You don't have to pay income taxes on withdrawals used for qualified medical expenses.
Frequently Asked Tax Questions:
Q. What forms do I need to file my taxes?
A. There are two tax forms you'll need to file your taxes: IRS Form 1099-SA and IRS Form 8889. We'll send you another form, IRS Form 5498-SA, to keep for your records but you do not need it to file your taxes.
You will need form 1099-SA to fill out form 8889 which is what you need to submit with your taxes.
Q. When will I get my tax forms?
A. IRS Form 1099-SA is typically available around the end of January and will be posted to your account and mailed if you elected for a paper form.
IRS Form 8889 can be downloaded at any time
IRS Form 5498-SA is typically available around the end of February. If you contribute in 2017 for 2016 you will also get another 5498-SA form in May.
Q. I had a Wells Fargo HSA. Now what happens with my tax forms?
A. Historical transaction reporting, access to statements and tax documentation on Wells Fargo Online® will be available for 240 days after the migration. Depending on your migration date you may also receive two sets of tax documents—one from Wells Fargo and one from Optum Bank. In 2017 and beyond, you will receive only one set of tax documents from Optum Bank.
Q. Why doesn’t my W-2 match the contributions on Form 5498-SA?
A. If the contributions on your W-2 don’t match your Form 5498-SA, you likely made after-tax contributions or contributions between Jan. 1, 2017 and Apr. 18, 2017 for the 2016 tax year.
Q. What do I need to report to the IRS?
A. With the tax benefits comes the need to report HSA activity to the IRS and keep track of your spending in case you have to prove you used funds for qualified medical expenses. It's up to you to keep track of your expenses and report any funds you use for nonqualified medical expenses.
Q. What happens if I contribute too much?
A. If you contribute more than the allowable amount to your HSA by accident or because you ended coverage in a qualifying high-deductible health plan and/or no longer meet the other requirements defined by the IRS, you will have to count the extra amount as taxable income and the IRS may have you pay a 6% excise tax on the excess contributions. The excise tax applies to each tax year the excess contribution remains in the account.
If you do make excess contributions, you can prevent being penalized by completing an Excess Contribution and Deposit Correction Request Form to have excess funds returned to you. This and other account forms are available after you log in.
Q. What if I only enrolled for part of the year?
A. When you enroll in a qualifying high-deductible health plan and open an HSA before the first day of December, you can contribute the total allowable amount for that year. To take advantage of the tax savings, however, you must:
- Stay enrolled in a qualifying high-deductible health plan for the following 12 months.
- Not have other health care coverage that would make you ineligible to contribute to an HSA.
Q. Where can I find my state tax information?
A. Each state can decide to follow the federal tax guidelines for HSAs or establish its own. Please consult a tax advisor regarding your state’s rules or visit your state’s Department of Revenue office for more information.
Q. Where can I find helpful Information from the IRS?
A. Visit the IRS website to read its guide, Health Savings Accounts and Other Tax-Favored Health Plans (IRS Publication 969).
KEEP YOUR HSA OPEN TO SAVE ON TAXES
You can't contribute to your HSA if you're no longer covered by a high-deductible health plan. But, you can still use funds in your HSA to pay for qualified medical expenses tax-free.
See more reasons not to close your HSA