The IRS recently released Form 8889, Health Savings Accounts (HSAs), and the related instructions. Form 8889 is used to report HSA contributions, figure HSA deductions and report HSA distributions. It is also used to assess amounts individuals must include in income and pay in additional taxes for distributions for non-qualified expenses or for failures to remain HSA eligible for the testing period after contributing under the “last month” rule.
The 2021 Form 8889 and instructions are like the 2020 versions. However, the instructions have been updated to indicate that HSAs can reimburse amounts paid for COVID-19 personal protective equipment (e.g., masks and hand sanitizers) or home testing (provided these amounts are not reimbursed by other sources). The 2021 version also reflects the updated HSA and HDHP limits and thresholds.
Although Form 8889 is filed by the HSA account holders, employers with HSA programs may want to be aware of the availability of the updated form and instructions.
2021 Form 8889 » 2021 Instructions for Form 8889 »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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