HSA tax center
Questions about how to save on taxes?
At Optum Financial we want to make sure you make the most of your HSA and that includes understanding all of the tax benefits.
Looking for your bank or tax statements? Sign in to your account online and select View statements from the I want to... drop down menu.
Questions about your taxes? We're here to help.
Q. What is the HSA contribution deadline?
A. You have until the tax filing deadline (typically April 15) to make contributions to your HSA for the previous year. An additional five business days are required for processing online payments if it is your first time submitting an online contribution.
Click here for more information on the annual contribution limits.
Q. How do I obtain a copy of my tax forms?
A. Sign in to your account online and select View statements from the I want to... drop down menu.
Q. How do I save on taxes with an HSA?
A. The money you contribute to your HSA is tax-deductible up to the annual contribution limit. For example, if you are in the 28 percent tax bracket and deposit $3,000 into your HSA, you could save $840 in federal income taxes. Money you take out of your HSA to pay for qualified medical expenses is tax-free. Interest you may earn on your HSA grows income tax free.
Q. Which forms do I need to file my taxes?
A. There are three tax forms associated with health savings accounts (HSAs): IRS Form 1099-SA, 5498-SA and IRS Form 8889.
Please use the information in your 1099-SA form, available online, to fill out IRS tax form 8889. Form 8889 is the only one you need to submit with your taxes.
- IRS form 1099-SA shows the amount of money you spent from your HSA during the tax year.
- IRS form 5498-SA shows the amount of money deposited into your HSA for the tax year.
- IRS form 8889 is the form you fill out and submit with your tax return.
Q. When will I get my tax forms?
A. IRS Form 1099-SA is typically available at the end of January. It will be posted to your account and mailed, if elected. IRS Form 8889 can be downloaded from IRS.gov at any time.
IRS Form 5498-SA is typically available around the end of January. If you contribute in the new year for the previous tax year, you will also get another 5498-SA form in May.
Q. Why doesn’t my W-2 match the 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 January 1 and tax day for the previous tax year.
Q. What do I need to report to the IRS?
A. In addition to the forms noted above, 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 about nonqualified expenses?
A: It’s up to you to maintain records to verify that funds were used for qualified medical expenses. Funds used for nonqualified expenses will be taxed as income and subject to a 20 percent penalty. If you mistakenly use your HSA for a nonqualified expense, you can return the funds to your HSA to avoid the penalty. Sign in to your account and download the Withdrawal Correction Form. Optum Financial must receive it by the tax filing deadline.
If you are 65 or older or enrolled in Medicare, you can use your HSA for nonmedical expenses without incurring a tax penalty. Those distributions will be treated like retirement income and will be subject to normal income tax.
Q. What happens if I contribute too much?
A. If you contribute more than the allowable amount, you will have to count the extra amount as taxable income, and the IRS may have you pay a 6 percent excise tax on the excess contributions. This 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 sign in.
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. State law is subject to change, for up to date information please consult a tax advisor regarding your state’s rules or visit your state’s Department of Revenue office for more information.
Eligible HSA contributions and earnings may be taxed by these states:
Alabama |
Iowa |
Missouri |
Pennsylvania |
Eligible HSA contributions are taxed by these states:
Consult your financial advisor or state department of revenue for more information.
California |
New Jersey |
States without state income taxes – eligible HSA contributions are not taxed:
Alaska |
Nevada |
Tennessee |
Washington |
HSA earnings (but not eligible contributions) may be taxed by these states:
Consult your financial advisor or state department of revenue for more information
New Hampshire |
Tennessee |
Self-directed mutual fund investment options are made available through the services of an independent investment advisor, or your plan sponsor. Discretionary advisory services are provided by Betterment LLC, an SEC-registered investment adviser, with associated brokerage transactions provided by Betterment Securities, Member FINRA/SIPC. For details and disclosures visit betterment.com. The Schwab Health Savings Brokerage Account is offered to certain account holders through Charles Schwab & Co., Inc., Member FINRA/SIPC. For details and disclosures, visit schwab.com. Brokerage services are offered to certain accountholders through TD Ameritrade, Inc., Member FDIC/SIPC and a subsidiary of The Charles Schwab Corporation. For details and disclosures, visit tdameritrade.com.
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