Health Care

Health Care

How do health care reform and taxes connect? The Affordable Care Act is single largest change to the tax code in two decades. Find help navigating the complexities of the new health care legislation, Medicare, Medicaid and other medical deductions.

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Pioneer
Posts: 1
Registered: ‎02-15-2016

HSA 1099-SA

I have an HSA account for my HDHP and used some of those monies for 2015 medical related events. This is supposed to be tax free. When I plug it into H&R Block desktop software, it is treating this is a taxable distribution on top of a 20% penalty since I am 35 yrs old. Why is it doing this? This is incorrect

 

Thanks,

Dags

Pioneer
Posts: 1
Registered: ‎02-15-2016

Re: HSA 1099-SA

This form needs to ask for the distribution code, and if it is 1 (normal distribution), do not include as taxable income and do not calculate 20% penalty.  This needs tro be fixed ASAP!

Pioneer
Posts: 1
Registered: ‎02-15-2016

Re: HSA 1099-SA

So I just got the Feb 19 update and this is still a problem.  I cannot enter  distribution code of "1" on the 1099-SA form.  It is treating this distribution as taxable.

 

Anyone seen a fix for this?

Tax Pro
Posts: 1,434
Registered: ‎09-04-2014

Re: HSA 1099-SA

[ Edited ]

Welcome

Distributions from your HSA are entered directly on form 8889, part ll, line 14a. Medical expenses paid with the distribution are entered on line 15. If the entire distribution was used for qualified medical expenses no penalty will be calculated. 

BettyB
Sr. Tax Analyst
Valued Pioneer
Posts: 4
Registered: ‎12-17-2017

Re: HSA 1099-SA

Best way I thought - the way I solved it !!

Fill Up Form 8889.  For example the 2016 Form. The software will bring it up.  WHATEVER distributions are shown in 1099-SA as being taken by You - use the same number as Being Used as Qualified Medical Expenses in Part B so that Distributions MINUS the Qualified Expenses are Zero which implies that Taxable Distribution is Zero.  Basically a normal family when having the HSA account uses the health card or equivalent for Qualified Medical Expenses.

Valued Pioneer
Posts: 4
Registered: ‎12-17-2017

Re: HSA 1099-SA

Please see my answer.