Quick Answer
You report HSA withdrawals on Form 8889, Part II, filed with your federal return for the year the money came out of the account. That's true even when the withdrawal reimburses a medical bill you paid years earlier. Line 14a is the total your HSA distributed that year, line 15 is the part that paid or reimbursed qualified medical expenses, and line 16 is the taxable remainder. If line 15 covers the whole total, line 16 is zero and none of it is federal taxable income.
Your HSA provider reports the total to you and the IRS on Form 1099-SA, but that form doesn't say what the money was for. You make that claim on line 15, and your receipts are what support it. Paying a bill out of pocket and saving the receipt isn't reported on Form 8889, which has no line for expenses you haven't reimbursed yet.
Which Year's Forms This Covers
Returns filed in early 2027 are for tax year 2026. When we wrote this on November 14, 2026, the IRS had posted the 2026 Form 8889 and its instructions only as drafts. The Form 8889 quotes below come from the final 2025 form and 2025 instructions. Part II has the same line numbers in the 2026 draft, but check the final 2026 instructions before you file.
Forms 1099-SA and 5498-SA are quoted from the April 2025 and December 2026 revisions, which their instructions say to use for 2026 information.
The Three Forms
| Form | Who fills it in | What it reports | When it's due |
|---|---|---|---|
| 1099-SA | Your HSA provider | Money that left your HSA during the year | Sent to you by January 31 |
| 5498-SA | Your HSA provider | Contributions and the account's year-end value | Sent to you by May 31 |
| 8889 | You | Contributions, your deduction, distributions, and any tax on them | With your Form 1040 |
The two provider dates come from Publication 1099, which also moves a due date that falls on a weekend or legal holiday to the next business day. January 31, 2027 is a Sunday and May 31, 2027 is Memorial Day, so for 2026 forms we count February 1 and June 1, 2027.
Form 1099-SA Shows What Came Out
- Box 1, gross distribution: The form says this "Shows the amount received this year. The amount may have been a direct payment to the medical service provider or distributed to you." Publication 969 says your total distributions include amounts paid with a debit card, so card purchases and reimbursements to yourself are counted together.
- Box 3, distribution code: 1 is a normal distribution, 2 is excess contributions, 3 is disability, 4 and 6 are death distributions, and 5 is a prohibited transaction.
- The other boxes: Box 2 is earnings on excess contributions, box 4 is the account's value on the date of death, and box 5 is the type of account.
What the form doesn't show is whether the money paid for qualified medical expenses. It tells recipients, "The payer isn't required to compute the taxable amount of any distribution." Notice 2004-2, Q&A 29, says HSA trustees and custodians aren't required to determine whether distributions are used for qualified medical expenses.
The instructions for providers say to use code 1 for normal distributions to the account holder, for direct payments to a medical provider, and when no other code applies. As we read that, a reimbursement for an old dental bill and a withdrawal spent on something else would both be coded 1. Code 1 doesn't mean a withdrawal is free of federal tax.
Moving money directly between HSA providers doesn't produce a 1099-SA. The same instructions tell providers not to report a trustee-to-trustee transfer from one HSA to another.
Form 5498-SA Shows What Went In
Form 5498-SA has no box for withdrawals. Box 2 is total contributions made during the calendar year, box 3 is contributions made the following year for that year, box 4 is rollover contributions, and box 5 is the account's fair market value at the end of the year.
The form says, "Don't attach Form 5498-SA to your income tax return. Instead, keep it for your records." Because providers have until the end of May to send it, it can arrive after you've filed. You don't need it to report withdrawals.
Form 8889, Part II, Line by Line
The Form 8889 instructions say you must file the form if your HSA made a distribution, "even if you have no taxable income or any other reason for filing" a return. If you file jointly and you each have an HSA, the form asks for a separate Part II for each spouse.
| Line | What goes there |
|---|---|
| 14a | Total distributions from all your HSAs for the year. The instructions say these "should be shown on Form 1099-SA, box 1." |
| 14b | Distributions you rolled over to another HSA, plus excess contributions and their earnings that you withdrew by the due date of your return, including extensions |
| 14c | Line 14a minus line 14b |
| 15 | "Qualified medical expenses paid using HSA distributions" |
| 16 | "Taxable HSA distributions": line 14c minus line 15, but not less than zero. This amount goes into the total on Schedule 1 (Form 1040), Part I, line 8f. |
| 17a | A box to check if any of the line 16 amount meets an exception to the additional 20% tax |
| 17b | 20% of the line 16 amount that doesn't meet an exception. This goes into the total on Schedule 2 (Form 1040), Part II. That's line 17c on the 2025 schedule and line 13c in the 2026 draft. |
Line 15
The instructions put the rule for line 15 in a caution: "Only include on line 15 distributions from your HSA that were used to pay you for qualified medical expenses not reimbursed by insurance or other coverage and that you incurred after the HSA was established."
The line 15 instructions make three points:
- It counts distributions, not expenses: Bills you paid out of pocket and haven't reimbursed don't go on line 15.
- Whose expenses count: Yours, your spouse's, and your dependents', plus a few people who would be your dependents except for specific rules listed in the instructions.
- No double benefit: The instructions say, "You cannot take a deduction on Schedule A (Form 1040) for any amount you include on line 15." It works the other way too. Notice 2004-50, Q&A 39, makes the exclusion depend on records showing the expense wasn't taken as an itemized deduction in any prior year, so a bill you already deducted doesn't belong on line 15 later.
The form asks for one number. It has nowhere to list individual receipts, and Publication 969 says of your records, "Don't send these records with your tax return."
Lines 17a and 17b
The instructions say distributions included in income on line 16 "are subject to an additional 20% tax unless one of the following exceptions applies." The exceptions are for distributions made after the account beneficiary dies, becomes disabled, or turns 65. The underlying law is section 223(f)(4) of the tax code.
The exceptions remove only the additional 20% tax. A withdrawal at 70 that isn't for qualified medical expenses still goes on line 16 as income.
An Example
In 2026 you use your HSA debit card for a $400 prescription, and you reimburse yourself $2,600 for a 2021 surgery that you paid for out of pocket. The surgery happened after your HSA was established. Your 1099-SA shows $3,000 in box 1 with code 1.
| Line | Amount |
|---|---|
| 14a | $3,000 |
| 14b | $0 |
| 14c | $3,000 |
| 15 | $3,000 |
| 16 | $0 |
| 17b | $0 |
Now suppose $600 of that $2,600 went to something that wasn't a qualified medical expense. Line 15 becomes $2,400 and line 16 becomes $600. If you're under 65 and not disabled, line 17b is $120. You'd also owe regular federal income tax on the $600, which is $132 in the 22% bracket.
Which Year's Return Shows an Old Expense?
The return for the year you take the money out. The line 14a instructions say, "Enter the total distributions your HSAs made in 2025." The line 15 instructions say to include "distributions from all HSAs in 2025" that were used for qualified medical expenses.
The line 15 instructions don't mention the year the expense was incurred. The only timing condition they give is that you incurred the expense "after the HSA was established."
The IRS statement that covers prior-year expenses directly is Notice 2004-50, Q&A 39: "a distribution from an HSA in the current year can be used to pay or reimburse expenses incurred in any prior year as long as the expenses were incurred after the HSA was established." Its example is a $1,500 expense incurred in December 2004 and reimbursed in June 2005, and it concludes, "The distribution is excludable from the account beneficiary's gross income."
Put together, a 2026 withdrawal that reimburses a 2019 bill goes on lines 14a and 15 of your 2026 Form 8889, and nothing changes on your 2019 return. The form and its instructions tie both lines to the year of the distribution, and the notice says a prior-year expense can be reimbursed. The Form 8889 instructions don't work through a prior-year example themselves, so combining the two is our reading, not a sentence the IRS wrote.
Line 14a follows your 1099-SA. If you ask for a reimbursement in late December and it's paid in January, check which year's 1099-SA it lands on before you file.
Here's what the instructions leave open:
- What "incurred" means: The Form 8889 instructions don't define it. The date you received the care is the cautious date to use.
- When your HSA was established: Publication 969 says, "State law determines when an HSA is established." It adds that an HSA funded by a rollover from another HSA "is established on the date the prior account was established." Our post on the records the IRS expects covers how to show that date.
- Whose expense it was, and when: The instructions list you, your spouse, and your dependents. They don't say whether that's judged when the expense was incurred or when you reimburse it, which matters for an old bill of a former spouse or a child who's no longer your dependent. Ask a tax professional before relying on one.
- How to match a withdrawal to receipts: Neither the form nor its instructions say how. That's left to your own records.
What Backs Up Line 15
Publication 969 says you "must keep records sufficient to show" three things:
- The distributions were exclusively to pay or reimburse qualified medical expenses.
- Those expenses hadn't been previously paid or reimbursed from another source.
- Those expenses hadn't been taken as an itemized deduction in any year.
Publication 969 doesn't list the documents. For a reimbursement of an old bill, we'd keep the itemized receipt, the insurer's Explanation of Benefits, and your returns for the years in between. What Records Does the IRS Expect for an HSA Reimbursement? goes through each one.
It also helps to keep a log that ties each withdrawal to the receipts it reimbursed. Nothing in Publication 969 or the Form 8889 instructions requires one, but it lets you add up line 15 from your own records and stops you from using the same receipt twice. Keep your 1099-SA and a copy of Form 8889 with that year's return.
Those records need to last past the reimbursement itself. Our guide on how long to keep HSA receipts explains why we read the clock as starting with the return that reports the withdrawal, not the year of the bill.
If a Withdrawal Didn't Qualify
It goes on line 16 as income, and 20% of it goes on line 17b unless an exception applies. There's a narrow way to undo a genuine mistake. Form 1099-SA says, "You may repay a mistaken distribution from an HSA no later than the due date of the tax return (not including extensions) following the first year you knew or should have known the distribution was a mistake, providing the trustee allows the repayment."
The Form 8889 instructions say there may be "very limited and unusual circumstances" in which you can return a mistaken distribution. Notice 2004-50, Q&A 37, asks for "clear and convincing evidence" that the money came out because of "a mistake of fact due to reasonable cause" before the repayment counts.
State Returns
Everything above is federal. The only state we've checked is California, which doesn't follow the federal HSA rules. The 2025 instructions for Schedule CA (540), the most recent we found, say:
- Contributions: "Federal law allows a deduction for contributions to an HSA account. California law does not conform." Employer contributions from Form W-2, box 12, code W, are added back on line 1h.
- Earnings: "Interest or earnings in an HSA are taxable in the year earned." The line 7a instructions also list gain or loss from the sale of investments inside an HSA among the items where California's figure can differ from the federal one.
- Withdrawals that didn't qualify: "Distributions from an HSA not used for qualified medical expenses, and included in federal income, are not taxable for California purposes." You subtract them on line 8f.
- Qualified withdrawals, if you itemize: "If you received a tax-free HSA distribution for qualified medical expenses, enter the qualified expenses paid that exceed 7.5% of federal AGI on line 4, column C."
We haven't read any other state's instructions, so we won't guess at them. Check your own state's forms or ask a tax professional.
Common Questions
Do I file Form 8889 if every withdrawal paid for medical expenses?
Yes. Form 1099-SA tells recipients to file Form 8889 "to report a distribution from these accounts even if the distribution isn't taxable."
My 1099-SA shows code 1. Is the withdrawal free of federal tax?
Not necessarily. Code 1 means a normal distribution. Whether it's free of federal tax depends on whether the money paid or reimbursed qualified medical expenses. You report that amount on line 15, and your records have to support it.
Can I reimburse old bills after I'm on Medicare or off an HSA-eligible plan?
The Form 8889 instructions say, "You can receive distributions from an HSA even if you are not currently eligible to have contributions made to the HSA." The withdrawal is reported the same way.
I didn't withdraw anything this year. Do I report the receipts I'm saving?
No. Form 8889 has no line for unreimbursed expenses. You still file it if you, your employer, or anyone else contributed to your HSA.
Do I send receipts with my return?
No. Publication 969 says to keep them with your tax records.
Does my HSA provider tell the IRS what I spent the money on?
Form 1099-SA has no box for it. Its five boxes cover the amount, earnings on excess contributions, a distribution code, the value on the date of death, and the type of account.
Final Thoughts
For the shoebox strategy, the year that matters on your tax return is the year you reimburse yourself. That year's Form 8889 shows the withdrawal on line 14a and the qualified part on line 15, and your saved receipts are the support for line 15. If you're still deciding whether to wait, our HSA shoebox strategy post covers how delayed reimbursement works and when it isn't worth doing.
Sources
- Form 8889: Health Savings Accounts (HSAs) (2025)
- Instructions for Form 8889 (2025 edition)
- Draft 2026 Form 8889 and draft 2026 instructions
- Form 1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA (Rev. April 2025)
- Form 5498-SA: HSA, Archer MSA, or Medicare Advantage MSA Information (Rev. December 2026)
- Instructions for Forms 1099-SA and 5498-SA (Rev. December 2026)
- IRS Publication 1099: General Instructions for Certain Information Returns (2026)
- IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans (2025 edition)
- IRS Notice 2004-2: Health Savings Accounts
- IRS Notice 2004-50: Health Savings Accounts, Additional Q&As
- 26 U.S. Code § 223: Health savings accounts
- California FTB: 2025 Instructions for Schedule CA (540)
This article is for informational purposes only and does not constitute tax or legal advice. Consult a licensed tax professional for advice specific to your situation.
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