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June 1, 2019
Question

My wife's dad passed away and she was the beneficiary of his HSA account. She received a 1099-SA from the bank. How do I enter this on turbo tax.

  • June 1, 2019
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1 reply

June 1, 2019

The way this works is this:

  • The moment your wife's dad passed, the HSA ceased to be an HSA.
  • Your wife received a 1099-SA showing a distribution from her dad's HSA, with a distribution code of '4' or '6'.
  • In your return (I assume you are filing married joint), do a Search for hsa (lower case) and jump to the result.
  • In the screen that asks about your medical accounts, check off that your wife has an HSA (even though she doesn't)
  • Continue and the next screen (or the one after) asks about distributions or payments from the HSA. Answer "yes"
  • Fill in the 3 1099-SA screens.

Now it gets tricky:

  • If your wife HAS an HSA, then you should answer all the subsequent questions for her HSA, not her dad's. Most especially, do NOT check "yes" to "did [name] inherit this HSA?" (because the 1099-SA already supplied all the information necessary)
  • If your wife does NOT have an HSA, then got through the rest of the questions, checking "no" whenever possible. These questions are about the HSA that TurboTax thinks your wife has because she had to check the HSA box in order to be able to enter the 1099-SA. You want to get through the rest of the HSA interview giving as little information as possible.
  • At the end, if she has an HSA (already), then there should be a 8889-S with data on it. If she didn't have an HSA, then there will probably be an 8889-S but with NO data (except for a zero here or there) on it. TurboTax will not file this.
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