Part V: Important Information & HSA Distributions
Please see IRS Publication 969: http://www.irs.gov/publications/p969/ar02.html#d0e672
You are the HSA owner and are responsible for using the account in a compliant fashion. DePaul University is not responsible for tax liabilities related to improper distributions from or contributions to the account.
A. Proper Use of HSA Accounts
B. Qualified Medical Expenses (See IRS Publication 969)
Qualified medical expenses are those incurred by yourself, your spouse, and other eligible dependents as described in IRS Publication 969.
C. HSA Distributions for Non-Qualified Expenses
D. HSA contributions and distributions must be reported with your income tax return on Form 8889.
Reporting Contributions on Your Return
HSA contributions are shown in box 12 of Form W-2 with code W. The amount shown in this box not only includes the employer contribution made by DePaul University, but also the amount you contributed to your HSA through pre-tax payroll deductions (these deductions are made through DePaul University Section 125 Cafeteria Plan.) This is the amount you should enter on form 8889 as the employer contribution amount.
Report all HSA contributions and distributions on Form 8889 following the instructions on the Form and file it with your Form 1040. You should include all contributions made for the year, including any contributions you made directly to your HSA that were not made through the University. This includes your direct contributions through mid-April of the following year. Contributions made through DePaul which are shown on the W-2, must also be shown on Form 8889. These contributions include both the employer contribution plus the contributions you made on a pre-tax basis through the University Section 125 Cafeteria Plan – both are reported on your W-2 as employer contributions.
You will have excess contributions if the contributions to your HSA for the year are greater than the legal limits described in the instructions for Form 8889. Please refer to the instructions to Form 8889 to determine if you have excess contributions and the steps you must take should you have excess contributions.
Note that DePaul University will not monitor whether or not contributions exceed the legal maximums. You, the participant, are responsible for ensuring that your contributions stay within allowed limits and, if they exceed those limits, you must take the appropriate actions.
Reporting HSA Distributions on Your Return
Distributions from an HSA that are used for qualified medical expenses for eligible individuals are excludable from gross income. Distributions not used for qualified medical expenses for eligible individuals must be reported as income and are also subject to an additional 20% penalty tax in most circumstances. See IRS publication 969 and IRS Form 8889 instructions for additional details.
Important: The University does not provide tax advice and the above information should not be construed as tax advice. You are responsible for the correct filing of your tax return and not the University. Therefore, please consult your tax advisor and carefully review the applicable tax instructions in completing your tax filing.
Records You Should Retain on File
If you have any questions, please call the Benefits Department at 312-362-8232.