Participants: Tax Time and your HSA, FSA, and Dependent Care
Tax Day is April 18th this year. That means for many folks, it’s crunch time to get personal income taxes done! We’ve got you covered.
Whether you’re filing your tax return from an app on your smartphone, or devoting your Saturday afternoon on the couch with your laptop and a stack of papers: we’ve got you covered, with helpful resources for reporting some common employer benefits. If you have a health savings account (SimplyHSA) or the dependent care FSA (BESTflex Plan), read on.
What forms are needed? IRS Forms 8889 and 1099-SA
Form 8889: If you made or received employer contributions (added funds) to your health savings account (HSA) last year, Form 8889 is required when filing taxes. This includes:
- HSA contributions you made to your HSA through salary reductions under a cafeteria plan
- Contributions from your employer to your HSA
- HSA contributions made to your HSA by someone else on your behalf
- Contributions made directly to a HSA custodian
If you received distributions (took funds out of) from your health savings account (HSA) last year, Form 8889 is required. Tax free distributions can be in the form of payments made directly to a health care provider or funds that you took out of the HSA to reimburse yourself for health care expenses. Taxable distributions and any associated penalties must be reported at tax time on Form 8889. And, if you made any post-tax contributions to your HSA, you may be able to claim an additional tax deduction. Use Form 8889 for this as well.
Form 1099-SA: Form 1099-SA is provided to you by your HSA custodian (bank). It represents a report of distributions made from your HSA. Use Form 1099-SA to find the dollar amount of HSA distributions from last year, to record in Form 8889 and then keep for your records. In the event of an IRS audit, you’re also responsible for having documentation of your health care expenses for which you used HSA funds. Keep all documents such as itemized medical invoices and Explanation of Benefits (EOBs).
IRS Form 8889 (Official instructions here)
IRS Form 1099-SA is issued by your HSA custodian or bank. (Official instructions here)
Dependent Care FSA
What forms are needed? IRS Form 2441
Participants of a dependent care flexible spending account, or “DCFSA” should complete Form 2441 to report several pieces of information:
- Name of your dependent care provider
- Amount of pre-tax benefits contributed to the DCFSA
- Information required for any child and dependent care tax credits that may be available to you.
The amount of pre-tax benefits contributed to your DCFSA can generally be found in your W-2, Box 10. Any amounts you contributed pre-tax to the dependent care FSA will not be reflected in the income amounts.
IRS Form 2441 (Official instructions here)
What forms are needed? N/A
Regular health care FSAs do not require any tax reporting. For real.
If you received any health care FSA contributions from an employer, you would see these reported as “flex credits” on your W-2 in Box 14. But this is for informational purposes only. You don’t need to report these numbers anywhere on your personal tax return!
We’re sorry this section isn’t more exciting.
*Employee Benefits Corporation does not provide tax advice. Always consult a tax advisor for questions about your tax returns.
Learn more about how your SimplyHSA works in FAQs.
Learn more about how your BESTflex dependent care flexible spending account works in FAQs.