Reporting earnings on a HSA

[WI guy]

I had a someone walk in to day with a Health Savings Account Year-End Status Report for 2005. This person earns interest on a HSA account through work. The earnings on the account was $71 for 2005. How is that reported? There was no 1099-int or any other form stating the earnings. Are the earnings interest income for 2005, or reinvested into the HSA?

WI guy

[LawrenceGR]

My Understanding

The way I understand it a HSA is treated much like an IRA. I think the only requirement is how much they contributed and how much was paid out. It is covered in thetaxbook.

[Delta]

tax-free earnings

HSA earnings would be tax free as long as the distributions from the account are used for qualified medical expenses. That is one reason why HSA's are so attractive.

[Jesse]

Wisconsin Schedule I adjustment

The interest and any employer contributions are taxable to the state of WI. The employer contributions are suppose to be included in Box 16 of W-2 also w/ a code W in box 12.