Payments from the Health Savings Account are generally not subject to income tax if you use the money to pay eligible expenses. If you use money from your Health Savings Account for other reasons, you will be subject to income tax and may be subject to an additional 20% penalty tax if you are under age 65. Certain exceptions apply. For example, HSA contributions in some states are subject to state income taxes.
Contact your tax advisor or review IRS Publication 969 for additional information.
You will need to file a Form 8889 for Health Savings Accounts (HSAs) with your Form 1040 to report contributions to your HSA and any distributions (withdrawals or payments) from your HSA. OptumHealth Bank will provide you with Form 8889 after January 31st of each year.
Any pre-tax contributions you make to your account will appear on your Form W-2. The amount of your pre-tax contributions, if any, will also reduce the taxable earnings shown on your W-2. You will receive a Form 1099-SA showing distributions from your HSA after January 31st each year.
OptumHealth Bank will also send you a Form 5498-SA for your records after May 1st each year. Form 5498-SA shows contributions to your account and the year-end account value.