File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Can Unemployed People File Taxes

Military State Tax ExemptionsFree Tax Return FilingHow To Do A 1040xFillable 1040x FormDownload A 1040ez Federal Tax FormFiling Ez Form OnlineH & R Block Free For Military1040nr Form 2011How To Amend A Tax Return OnlineFree Tax Filing2012 Tax FilingE-file State Tax OnlyHow Can I File 2012 Taxes OnlineAmend Colorado Tax ReturnH & R Block Free TaxesCan I Efile 1040xAmended Tax Return For 2010FreefileOnline Taxes H&rblockIrs Forms For 20121040 Ez 20122013 Ez Tax FormIrs Tax Amendment FormCan I Still File 2011 Taxes OnlineTurbotax 2012 Amended ReturnTaxcut ComSample 1040x Filled OutFree Tax Preparation1040x Form 2012File Taxes 20091040 Ez Tax ReturnEftpsIrs 1040ez Form OnlineFree 2006 Tax SoftwareWhere Do I File My 2011 Federal Tax Return2012 1040 EzTaxes For MilitaryFree H & R Block FilingHow To File State Taxes FreeAmended Returns

Can Unemployed People File Taxes

Can unemployed people file taxes 1. Can unemployed people file taxes   Organizations Subject to the Tax Table of Contents The tax on unrelated business income applies to most organizations exempt from tax under section 501(a). Can unemployed people file taxes These organizations include charitable, religious, scientific, and other organizations described in section 501(c), as well as employees' trusts forming part of pension, profit-sharing, and stock bonus plans described in section 401(a). Can unemployed people file taxes In addition, the following are subject to the tax on unrelated business income. Can unemployed people file taxes Individual retirement arrangements (IRAs), including traditional IRAs, Roth IRAs, Coverdell IRAs, simplified employee pensions (SEP-IRAs), and savings incentive match plans for employees (SIMPLE IRAs). Can unemployed people file taxes State and municipal colleges and universities. Can unemployed people file taxes Qualified state tuition programs. Can unemployed people file taxes Medical savings accounts (MSAs) described in section 220(d). Can unemployed people file taxes Coverdell savings accounts described in section 530. Can unemployed people file taxes U. Can unemployed people file taxes S. Can unemployed people file taxes instrumentalities. Can unemployed people file taxes   A corporation that is a U. Can unemployed people file taxes S. Can unemployed people file taxes instrumentality described in section 501(c)(1) is not subject to the tax on unrelated business income if the corporation is organized under an Act of Congress and, under the Act, is exempt from federal income taxes. Can unemployed people file taxes Colleges and universities. Can unemployed people file taxes   Colleges and universities that are agencies or instrumentalities of any government or any political subdivision of a government, or that are owned or operated by a government or political subdivision of a government, are subject to the tax on unrelated business income. Can unemployed people file taxes As used here, the word government includes any foreign government (to the extent not contrary to a treaty) and all domestic governments (the United States and any of its possessions, any state, and the District of Columbia). Can unemployed people file taxes   The tax is on the unrelated business income of both the universities and colleges themselves and on their wholly owned tax exempt subsidiary organizations. Can unemployed people file taxes It is immaterial whether the business is conducted by the university or by a separately incorporated wholly owned subsidiary. Can unemployed people file taxes If the business activity is unrelated, the income in both instances will be subject to the tax. Can unemployed people file taxes If the primary purpose of a wholly owned subsidiary is to operate or conduct any unrelated trade or business (other than holding title to property and collecting income from it), the subsidiary is not an exempt organization, and this rule does not apply. Can unemployed people file taxes Title-holding corporations. Can unemployed people file taxes   When an exempt title-holding corporation, described in section 501(c)(2), pays any of its net income to an organization that itself is exempt from tax under section 501(a) (or would pay such an amount except that the expenses of collecting its income exceed the amount collected) and files a consolidated return with that organization, the title-holding corporation is treated, for unrelated business income tax purposes, as organized and operated for the same purposes as the exempt payee organization. Can unemployed people file taxes   Thus, a title-holding corporation whose source of income is related to the exempt purposes of the payee organization is not subject to the unrelated business income tax if the holding corporation and the payee organization file a consolidated return. Can unemployed people file taxes However, if the source of the income is not so related, the title-holding corporation is subject to unrelated business income tax. Can unemployed people file taxes Example. Can unemployed people file taxes X, a title-holding corporation, is required to distribute its net income to A, an exempt organization. Can unemployed people file taxes During the tax year, X realizes net income of $900,000 from source M, which is related to A's exempt function. Can unemployed people file taxes X also receives $100,000 from source N, which is not related to A's exempt function. Can unemployed people file taxes X and A file a consolidated return for the tax year. Can unemployed people file taxes X has unrelated business income of $100,000. Can unemployed people file taxes Prev  Up  Next   Home   More Online Publications
 
Print - Click this link to Print this page

Tools

Filing and paying your taxes should be as convenient as possible. That's why the IRS provides you with many helpful tools, including the following featured interactive forms, calculators and tools:

 

  Free File
Prepare and file your federal income taxes online—it's easy and it's free!
  IRS Withholding Calculator
Estimate the amount that should be withheld from your paycheck for federal income tax purposes.
  Get Transcript for My Tax Records
View your transcript online and print immediately.
  Electronic Filing PIN Request
Get your Electronic Filing PIN, a one-time code used to verify your identity when you submit your tax return electronically.
 
  Where's My Refund?
Check the status of your refund online within 24 hours after we have received your e-filed return or 4 weeks after you mail a paper return
  Online Employer Identification Number (EIN)
Get your EIN within minutes without picking up the phone or mailing/faxing a paper Form SS-4.
 
  .Where's My Amended Return?
Track the status of your amended return after it has been filed.
  e-Services for Tax Professionals
Register as an approved IRS business partner (e.g., e-filing tax professionals) and conduct business electronically with the IRS.
  Online Payment Agreement
Determine if you're eligible and apply for an online payment agreement if you have a tax liability you can't completely pay today.
  Electronic Federal Tax Payment System
Pay your federal taxes on-line or by phone through EFTPS, a free tax payment system.
  First Time Homebuyer Credit Account Look-up
Did you receive the First Time Homebuyer Credit?  You can now check the status of your FTHBC online 24/7  for information on your repayments and account balance.
   


Other Helpful Tools
In addition to the tools featured above, IRS provides you with the following:
 

 

Page Last Reviewed or Updated: 19-Mar-2014

The Can Unemployed People File Taxes

Can unemployed people file taxes Publication 969 - Main Content Table of Contents Health Savings Accounts (HSAs)Qualifying for an HSA Contributions to an HSA Distributions From an HSA Balance in an HSA Death of HSA Holder Filing Form 8889 Employer Participation Medical Savings Accounts (MSAs)Archer MSAs Contributions to an MSA Distributions From an MSA Balance in an Archer MSA Death of the Archer MSA Holder Filing Form 8853 Employer Participation Medicare Advantage MSAs Flexible Spending Arrangements (FSAs)Qualifying for an FSA Contributions to an FSA Distributions From an FSA Balance in an FSA Employer Participation Health Reimbursement Arrangements (HRAs)Qualifying for an HRA Contributions to an HRA Distributions From an HRA Balance in an HRA Employer Participation How To Get Tax HelpLow Income Taxpayer Clinics Health Savings Accounts (HSAs) A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. Can unemployed people file taxes You must be an eligible individual to qualify for an HSA. Can unemployed people file taxes No permission or authorization from the IRS is necessary to establish an HSA. Can unemployed people file taxes You set up an HSA with a trustee. Can unemployed people file taxes A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. Can unemployed people file taxes The HSA can be established through a trustee that is different from your health plan provider. Can unemployed people file taxes Your employer may already have some information on HSA trustees in your area. Can unemployed people file taxes If you have an Archer MSA, you can generally roll it over into an HSA tax free. Can unemployed people file taxes See Rollovers, later. Can unemployed people file taxes What are the benefits of an HSA?   You may enjoy several benefits from having an HSA. Can unemployed people file taxes You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040. Can unemployed people file taxes Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. Can unemployed people file taxes The contributions remain in your account until you use them. Can unemployed people file taxes The interest or other earnings on the assets in the account are tax free. Can unemployed people file taxes Distributions may be tax free if you pay qualified medical expenses. Can unemployed people file taxes See Qualified medical expenses , later. Can unemployed people file taxes An HSA is “portable. Can unemployed people file taxes ” It stays with you if you change employers or leave the work force. Can unemployed people file taxes Qualifying for an HSA To be an eligible individual and qualify for an HSA, you must meet the following requirements. Can unemployed people file taxes You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month. Can unemployed people file taxes You have no other health coverage except what is permitted under Other health coverage , later. Can unemployed people file taxes You are not enrolled in Medicare. Can unemployed people file taxes You cannot be claimed as a dependent on someone else's 2013 tax return. Can unemployed people file taxes Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers). Can unemployed people file taxes If you meet these requirements, you are an eligible individual even if your spouse has non-HDHP family coverage, provided your spouse's coverage does not cover you. Can unemployed people file taxes If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an HSA contribution. Can unemployed people file taxes This is true even if the other person does not actually claim your exemption. Can unemployed people file taxes Each spouse who is an eligible individual who wants an HSA must open a separate HSA. Can unemployed people file taxes You cannot have a joint HSA. Can unemployed people file taxes High deductible health plan (HDHP). Can unemployed people file taxes   An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Can unemployed people file taxes Out-of-pocket expenses include copayments and other amounts, but do not include premiums. Can unemployed people file taxes   An HDHP may provide preventive care benefits without a deductible or with a deductible less than the minimum annual deductible. Can unemployed people file taxes Preventive care includes, but is not limited to, the following. Can unemployed people file taxes Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals. Can unemployed people file taxes Routine prenatal and well-child care. Can unemployed people file taxes Child and adult immunizations. Can unemployed people file taxes Tobacco cessation programs. Can unemployed people file taxes Obesity weight-loss programs. Can unemployed people file taxes Screening services. Can unemployed people file taxes This includes screening services for the following: Cancer. Can unemployed people file taxes Heart and vascular diseases. Can unemployed people file taxes Infectious diseases. Can unemployed people file taxes Mental health conditions. Can unemployed people file taxes Substance abuse. Can unemployed people file taxes Metabolic, nutritional, and endocrine conditions. Can unemployed people file taxes Musculoskeletal disorders. Can unemployed people file taxes Obstetric and gynecological conditions. Can unemployed people file taxes Pediatric conditions. Can unemployed people file taxes Vision and hearing disorders. Can unemployed people file taxes For more information on screening services, see Notice 2004-23, 2004-15 I. Can unemployed people file taxes R. Can unemployed people file taxes B. Can unemployed people file taxes 725 available at www. Can unemployed people file taxes irs. Can unemployed people file taxes gov/irb/2004-15_IRB/ar10. Can unemployed people file taxes html. Can unemployed people file taxes     The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2013. Can unemployed people file taxes      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,250 $12,500 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Can unemployed people file taxes Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. Can unemployed people file taxes    The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2014. Can unemployed people file taxes      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,350 $12,700 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Can unemployed people file taxes Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. Can unemployed people file taxes   Self-only HDHP coverage is an HDHP covering only an eligible individual. Can unemployed people file taxes Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual). Can unemployed people file taxes Example. Can unemployed people file taxes An eligible individual and his dependent child are covered under an “employee plus one” HDHP offered by the individual's employer. Can unemployed people file taxes This is family HDHP coverage. Can unemployed people file taxes Family plans that do not meet the high deductible rules. Can unemployed people file taxes   There are some family plans that have deductibles for both the family as a whole and for individual family members. Can unemployed people file taxes Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. Can unemployed people file taxes If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. Can unemployed people file taxes Example. Can unemployed people file taxes You have family health insurance coverage in 2013. Can unemployed people file taxes The annual deductible for the family plan is $3,500. Can unemployed people file taxes This plan also has an individual deductible of $1,500 for each family member. Can unemployed people file taxes The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($2,500) for family coverage. Can unemployed people file taxes Other health coverage. Can unemployed people file taxes   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. Can unemployed people file taxes However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. Can unemployed people file taxes    You can have additional insurance that provides benefits only for the following items. Can unemployed people file taxes Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property. Can unemployed people file taxes A specific disease or illness. Can unemployed people file taxes A fixed amount per day (or other period) of hospitalization. Can unemployed people file taxes   You can also have coverage (whether provided through insurance or otherwise) for the following items. Can unemployed people file taxes Accidents. Can unemployed people file taxes Disability. Can unemployed people file taxes Dental care. Can unemployed people file taxes Vision care. Can unemployed people file taxes Long-term care. Can unemployed people file taxes    Plans in which substantially all of the coverage is through the items listed earlier are not HDHPs. Can unemployed people file taxes For example, if your plan provides coverage substantially all of which is for a specific disease or illness, the plan is not an HDHP for purposes of establishing an HSA. Can unemployed people file taxes Prescription drug plans. Can unemployed people file taxes   You can have a prescription drug plan, either as part of your HDHP or a separate plan (or rider), and qualify as an eligible individual if the plan does not provide benefits until the minimum annual deductible of the HDHP has been met. Can unemployed people file taxes If you can receive benefits before that deductible is met, you are not an eligible individual. Can unemployed people file taxes Other employee health plans. Can unemployed people file taxes   An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally cannot make contributions to an HSA. Can unemployed people file taxes Health FSAs and HRAs are discussed later. Can unemployed people file taxes   However, an employee can make contributions to an HSA while covered under an HDHP and one or more of the following arrangements. Can unemployed people file taxes Limited-purpose health FSA or HRA. Can unemployed people file taxes These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. Can unemployed people file taxes Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible. Can unemployed people file taxes Suspended HRA. Can unemployed people file taxes Before the beginning of an HRA coverage period, you can elect to suspend the HRA. Can unemployed people file taxes The HRA does not pay or reimburse, at any time, the medical expenses incurred during the suspension period except preventive care and items listed under Other health coverage. Can unemployed people file taxes When the suspension period ends, you are no longer eligible to make contributions to an HSA. Can unemployed people file taxes Post-deductible health FSA or HRA. Can unemployed people file taxes These arrangements do not pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. Can unemployed people file taxes The deductible for these arrangements does not have to be the same as the deductible for the HDHP, but benefits may not be provided before the minimum annual deductible amount is met. Can unemployed people file taxes Retirement HRA. Can unemployed people file taxes This arrangement pays or reimburses only those medical expenses incurred after retirement. Can unemployed people file taxes After retirement you are no longer eligible to make contributions to an HSA. Can unemployed people file taxes Health FSA – grace period. Can unemployed people file taxes   Coverage during a grace period by a general purpose health FSA is allowed if the balance in the health FSA at the end of its prior year plan is zero. Can unemployed people file taxes See Flexible Spending Arrangements (FSAs) , later. Can unemployed people file taxes Contributions to an HSA Any eligible individual can contribute to an HSA. Can unemployed people file taxes For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. Can unemployed people file taxes For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Can unemployed people file taxes Family members or any other person may also make contributions on behalf of an eligible individual. Can unemployed people file taxes Contributions to an HSA must be made in cash. Can unemployed people file taxes Contributions of stock or property are not allowed. Can unemployed people file taxes Limit on Contributions The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. Can unemployed people file taxes For 2013, if you have self-only HDHP coverage, you can contribute up to $3,250. Can unemployed people file taxes If you have family HDHP coverage, you can contribute up to $6,450. Can unemployed people file taxes For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. Can unemployed people file taxes If you have family HDHP coverage you can contribute up to $6,550. Can unemployed people file taxes If you were, or were considered (under the last-month rule, discussed later), an eligible individual for the entire year and did not change your type of coverage, you can contribute the full amount based on your type of coverage. Can unemployed people file taxes However, if you were not an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of: The limitation shown on the Line 3 Limitation Chart and Worksheetin the Instructions for Form 8889, Health Savings Accounts (HSAs), or The maximum annual HSA contribution based on your HDHP coverage (self-only or family) on the first day of the last month of your tax year. Can unemployed people file taxes If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2013 is $6,450 even if you changed coverage during the year. Can unemployed people file taxes Last-month rule. Can unemployed people file taxes   Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. Can unemployed people file taxes You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. Can unemployed people file taxes Testing period. Can unemployed people file taxes   If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. Can unemployed people file taxes For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. Can unemployed people file taxes For example, December 1, 2013, through December 31, 2014. Can unemployed people file taxes   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule. Can unemployed people file taxes You include this amount in your income in the year in which you fail to be an eligible individual. Can unemployed people file taxes This amount is also subject to a 10% additional tax. Can unemployed people file taxes The income and additional tax are shown on Form 8889, Part III. Can unemployed people file taxes Example 1. Can unemployed people file taxes Chris, age 53, becomes an eligible individual on December 1, 2013. Can unemployed people file taxes He has family HDHP coverage on that date. Can unemployed people file taxes Under the last-month rule, he contributes $6,450 to his HSA. Can unemployed people file taxes Chris fails to be an eligible individual in June 2014. Can unemployed people file taxes Because Chris did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), he must include in his 2014 income the contributions made in 2013 that would not have been made except for the last-month rule. Can unemployed people file taxes Chris uses the worksheet in the Form 8889 instructions to determine this amount. Can unemployed people file taxes January -0- February -0- March -0- April -0- May -0- June -0- July -0- August -0- September -0- October -0- November -0- December $6,450. Can unemployed people file taxes 00 Total for all months $6,450. Can unemployed people file taxes 00 Limitation. Can unemployed people file taxes Divide the total by 12 $537. Can unemployed people file taxes 50 Chris would include $5,912. Can unemployed people file taxes 50 ($6,450. Can unemployed people file taxes 00 – $537. Can unemployed people file taxes 50) in his gross income on his 2014 tax return. Can unemployed people file taxes Also, a 10% additional tax applies to this amount. Can unemployed people file taxes Example 2. Can unemployed people file taxes Erika, age 39, has self-only HDHP coverage on January 1, 2013. Can unemployed people file taxes Erika changes to family HDHP coverage on November 1, 2013. Can unemployed people file taxes Because Erika has family HDHP coverage on December 1, 2013, she contributes $6,450 for 2013. Can unemployed people file taxes Erika fails to be an eligible individual in March 2014. Can unemployed people file taxes Because she did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), she must include in income the contribution made that would not have been made except for the last-month rule. Can unemployed people file taxes Erika uses the worksheet in the Form 8889 instructions to determine this amount. Can unemployed people file taxes January $3,250. Can unemployed people file taxes 00 February $3,250. Can unemployed people file taxes 00 March $3,250. Can unemployed people file taxes 00 April $3,250. Can unemployed people file taxes 00 May $3,250. Can unemployed people file taxes 00 June $3,250. Can unemployed people file taxes 00 July $3,250. Can unemployed people file taxes 00 August $3,250. Can unemployed people file taxes 00 September $3,250. Can unemployed people file taxes 00 October $3,250. Can unemployed people file taxes 00 November $6,450. Can unemployed people file taxes 00 December $6,450. Can unemployed people file taxes 00 Total for all months $45,400. Can unemployed people file taxes 00 Limitation. Can unemployed people file taxes Divide the total by 12 $3,783. Can unemployed people file taxes 34 Erika would include $2,666. Can unemployed people file taxes 67 ($6,450 – $3,783. Can unemployed people file taxes 34) in her gross income on her 2014 tax return. Can unemployed people file taxes Also, a 10% additional tax applies to this amount. Can unemployed people file taxes Additional contribution. Can unemployed people file taxes   If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Can unemployed people file taxes For example, if you have self-only coverage, you can contribute up to $4,250 (the contribution limit for self-only coverage ($3,250) plus the additional contribution of $1,000). Can unemployed people file taxes However, see Enrolled in Medicare , later. Can unemployed people file taxes If you have more than one HSA in 2013, your total contributions to all the HSAs cannot be more than the limits discussed earlier. Can unemployed people file taxes Reduction of contribution limit. Can unemployed people file taxes   You must reduce the amount that can be contributed (including any additional contribution) to your HSA by the amount of any contribution made to your Archer MSA (including employer contributions) for the year. Can unemployed people file taxes A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. Can unemployed people file taxes Rules for married people. Can unemployed people file taxes   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. Can unemployed people file taxes If each spouse has family coverage under a separate plan, the contribution limit for 2013 is $6,450. Can unemployed people file taxes You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. Can unemployed people file taxes After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. Can unemployed people file taxes The rules for married people apply only if both spouses are eligible individuals. Can unemployed people file taxes If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. Can unemployed people file taxes If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,450. Can unemployed people file taxes Each spouse must make the additional contribution to his or her own HSA. Can unemployed people file taxes Example. Can unemployed people file taxes For 2013, Mr. Can unemployed people file taxes Auburn and his wife are both eligible individuals. Can unemployed people file taxes They each have family coverage under separate HDHPs. Can unemployed people file taxes Mr. Can unemployed people file taxes Auburn is 58 years old and Mrs. Can unemployed people file taxes Auburn is 53. Can unemployed people file taxes Mr. Can unemployed people file taxes and Mrs. Can unemployed people file taxes Auburn can split the family contribution limit ($6,450) equally or they can agree on a different division. Can unemployed people file taxes If they split it equally, Mr. Can unemployed people file taxes Auburn can contribute $4,225 to an HSA (one-half the maximum contribution for family coverage ($3,225) + $1,000 additional contribution) and Mrs. Can unemployed people file taxes Auburn can contribute $3,225 to an HSA. Can unemployed people file taxes Employer contributions. Can unemployed people file taxes   You must reduce the amount you, or any other person, can contribute to your HSA by the amount of any contributions made by your employer that are excludable from your income. Can unemployed people file taxes This includes amounts contributed to your account by your employer through a cafeteria plan. Can unemployed people file taxes Enrolled in Medicare. Can unemployed people file taxes   Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. Can unemployed people file taxes Example. Can unemployed people file taxes You turned age 65 in July 2013 and enrolled in Medicare. Can unemployed people file taxes You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. Can unemployed people file taxes Your contribution limit is $2,125 ($4,250 × 6 ÷ 12). Can unemployed people file taxes Qualified HSA funding distribution. Can unemployed people file taxes   A qualified HSA funding distribution may be made from your traditional IRA or Roth IRA to your HSA. Can unemployed people file taxes This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. Can unemployed people file taxes For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made. Can unemployed people file taxes   The maximum qualified HSA funding distribution depends on the HDHP coverage (self-only or family) you have on the first day of the month in which the contribution is made and your age as of the end of the tax year. Can unemployed people file taxes The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. Can unemployed people file taxes The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. Can unemployed people file taxes The qualified HSA funding distribution is shown on Form 8889 for the year in which the distribution is made. Can unemployed people file taxes   You can make only one qualified HSA funding distribution during your lifetime. Can unemployed people file taxes However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage. Can unemployed people file taxes The total qualified HSA funding distribution cannot be more than the contribution limit for family HDHP coverage plus any additional contribution to which you are entitled. Can unemployed people file taxes Example. Can unemployed people file taxes In 2013, you are an eligible individual, age 57, with self-only HDHP coverage. Can unemployed people file taxes You can make a qualified HSA funding distribution of $4,250 ($3,250 plus $1,000 additional contribution). Can unemployed people file taxes Funding distribution – testing period. Can unemployed people file taxes   You must remain an eligible individual during the testing period. Can unemployed people file taxes For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month. Can unemployed people file taxes For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, 2013, your testing period begins in August 2013, and ends on August 31, 2014. Can unemployed people file taxes   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the qualified HSA funding distribution. Can unemployed people file taxes You include this amount in income in the year in which you fail to be an eligible individual. Can unemployed people file taxes This amount is also subject to a 10% additional tax. Can unemployed people file taxes The income and the additional tax are shown on Form 8889, Part III. Can unemployed people file taxes   Each qualified HSA funding distribution allowed has its own testing period. Can unemployed people file taxes For example, you are an eligible individual, age 45, with self-only HDHP coverage. Can unemployed people file taxes On June 18, 2013, you make a qualified HSA funding distribution of $3,250. Can unemployed people file taxes On July 27, 2013, you enroll in family HDHP coverage and on August 17, 2013, you make a qualified HSA funding distribution of $3,200. Can unemployed people file taxes Your testing period for the first distribution begins in June 2013 and ends on June 30, 2014. Can unemployed people file taxes Your testing period for the second distribution begins in August 2013 and ends on August 31, 2014. Can unemployed people file taxes   The testing period rule that applies under the last-month rule (discussed earlier) does not apply to amounts contributed to an HSA through a qualified HSA funding distribution. Can unemployed people file taxes If you remain an eligible individual during the entire funding distribution testing period, then no amount of that distribution is included in income and will not be subject to the additional tax for failing to meet the last-month rule testing period. Can unemployed people file taxes Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. Can unemployed people file taxes Archer MSAs and other HSAs. Can unemployed people file taxes   You can roll over amounts from Archer MSAs and other HSAs into an HSA. Can unemployed people file taxes You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. Can unemployed people file taxes Rollover contributions do not need to be in cash. Can unemployed people file taxes Rollovers are not subject to the annual contribution limits. Can unemployed people file taxes   You must roll over the amount within 60 days after the date of receipt. Can unemployed people file taxes You can make only one rollover contribution to an HSA during a 1-year period. Can unemployed people file taxes Note. Can unemployed people file taxes If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer is not considered a rollover. Can unemployed people file taxes There is no limit on the number of these transfers. Can unemployed people file taxes Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. Can unemployed people file taxes When To Contribute You can make contributions to your HSA for 2013 until April 15, 2014. Can unemployed people file taxes If you fail to be an eligible individual during 2013, you can still make contributions, up until April 15, 2014, for the months you were an eligible individual. Can unemployed people file taxes Your employer can make contributions to your HSA between January 1, 2014, and April 15, 2014, that are allocated to 2013. Can unemployed people file taxes Your employer must notify you and the trustee of your HSA that the contribution is for 2013. Can unemployed people file taxes The contribution will be reported on your 2014 Form W-2. Can unemployed people file taxes Reporting Contributions on Your Return Contributions made by your employer are not included in your income. Can unemployed people file taxes Contributions to an employee's account by an employer using the amount of an employee's salary reduction through a cafeteria plan are treated as employer contributions. Can unemployed people file taxes Generally, you can claim contributions you made and contributions made by any other person, other than your employer, on your behalf, as an adjustment to income. Can unemployed people file taxes Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Can unemployed people file taxes The contributions are treated as a distribution of money and are not included in the partner's gross income. Can unemployed people file taxes Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are deductible by the partnership and includible in the partner's gross income. Can unemployed people file taxes In both situations, the partner can deduct the contribution made to the partner's HSA. Can unemployed people file taxes Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are deductible by the S corporation and includible in the shareholder-employee's gross income. Can unemployed people file taxes The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Can unemployed people file taxes Form 8889. Can unemployed people file taxes   Report all contributions to your HSA on Form 8889 and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes You should include all contributions made for 2013, including those made by April 15, 2014, that are designated for 2013. Can unemployed people file taxes Contributions made by your employer and qualified HSA funding distributions are also shown on the form. Can unemployed people file taxes   You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount contributed to your HSA during the year. Can unemployed people file taxes Your employer's contributions also will be shown in box 12 of Form W-2, Wage and Tax Statement, with code W. Can unemployed people file taxes Follow the instructions for Form 8889. Can unemployed people file taxes Report your HSA deduction on Form 1040 or Form 1040NR. Can unemployed people file taxes Excess contributions. Can unemployed people file taxes   You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. Can unemployed people file taxes Excess contributions are not deductible. Can unemployed people file taxes Excess contributions made by your employer are included in your gross income. Can unemployed people file taxes If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Can unemployed people file taxes   Generally, you must pay a 6% excise tax on excess contributions. Can unemployed people file taxes See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. Can unemployed people file taxes The excise tax applies to each tax year the excess contribution remains in the account. Can unemployed people file taxes   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. Can unemployed people file taxes You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. Can unemployed people file taxes You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. Can unemployed people file taxes If you fail to remain an eligible individual during any of the testing periods, discussed earlier, the amount you have to include in income is not an excess contribution. Can unemployed people file taxes If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. Can unemployed people file taxes Deducting an excess contribution in a later year. Can unemployed people file taxes   You may be able to deduct excess contributions for previous years that are still in your HSA. Can unemployed people file taxes The excess contribution you can deduct for the current year is the lesser of the following two amounts. Can unemployed people file taxes Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year. Can unemployed people file taxes The total excess contributions in your HSA at the beginning of the year. Can unemployed people file taxes   Amounts contributed for the year include contributions by you, your employer, and any other person. Can unemployed people file taxes They also include any qualified HSA funding distribution made to your HSA. Can unemployed people file taxes Any excess contribution remaining at the end of a tax year is subject to the excise tax. Can unemployed people file taxes See Form 5329. Can unemployed people file taxes Distributions From an HSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. Can unemployed people file taxes When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your HSA to send you a distribution from your HSA. Can unemployed people file taxes You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. Can unemployed people file taxes If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. Can unemployed people file taxes You do not have to make distributions from your HSA each year. Can unemployed people file taxes If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. Can unemployed people file taxes Generally, a distribution is money you get from your health savings account. Can unemployed people file taxes Your total distributions include amounts paid with a debit card that restricts payments to health care and amounts withdrawn from the HSA by other individuals that you have designated. Can unemployed people file taxes The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Can unemployed people file taxes Qualified medical expenses. Can unemployed people file taxes   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. Can unemployed people file taxes These are explained in Publication 502, Medical and Dental Expenses. Can unemployed people file taxes   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for HSA purposes. Can unemployed people file taxes A medicine or drug will be a qualified medical expense for HSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. Can unemployed people file taxes   For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. Can unemployed people file taxes State law determines when an HSA is established. Can unemployed people file taxes An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. Can unemployed people file taxes   If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses. Can unemployed people file taxes   Qualified medical expenses are those incurred by the following persons. Can unemployed people file taxes You and your spouse. Can unemployed people file taxes All dependents you claim on your tax return. Can unemployed people file taxes Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Can unemployed people file taxes    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Can unemployed people file taxes You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA. Can unemployed people file taxes Insurance premiums. Can unemployed people file taxes   You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: Long-term care insurance. Can unemployed people file taxes Health care continuation coverage (such as coverage under COBRA). Can unemployed people file taxes Health care coverage while receiving unemployment compensation under federal or state law. Can unemployed people file taxes Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). Can unemployed people file taxes   The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. Can unemployed people file taxes See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). Can unemployed people file taxes   Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. Can unemployed people file taxes For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally are not qualified medical expenses. Can unemployed people file taxes Health coverage tax credit. Can unemployed people file taxes   You cannot claim this credit for premiums that you pay with a tax-free distribution from your HSA. Can unemployed people file taxes See Publication 502 for more information on this credit. Can unemployed people file taxes Deemed distributions from HSAs. Can unemployed people file taxes   The following situations result in deemed taxable distributions from your HSA. Can unemployed people file taxes You engaged in any transaction prohibited by section 4975 with respect to any of your HSAs, at any time in 2013. Can unemployed people file taxes Your account ceases to be an HSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8889. Can unemployed people file taxes You used any portion of any of your HSAs as security for a loan at any time in 2013. Can unemployed people file taxes You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. Can unemployed people file taxes   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the HSA, Lending of money between you and the HSA, Furnishing goods, services, or facilities between you and the HSA, and Transfer to or use by you, or for your benefit, of any assets of the HSA. Can unemployed people file taxes   Any deemed distribution will not be treated as used to pay qualified medical expenses. Can unemployed people file taxes These distributions are included in your income and are subject to the additional 20% tax, discussed later. Can unemployed people file taxes Recordkeeping. Can unemployed people file taxes You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. Can unemployed people file taxes Do not send these records with your tax return. Can unemployed people file taxes Keep them with your tax records. Can unemployed people file taxes Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). Can unemployed people file taxes If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8889. Can unemployed people file taxes However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. Can unemployed people file taxes Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. Can unemployed people file taxes Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes You may have to pay an additional 20% tax on your taxable distribution. Can unemployed people file taxes HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA. Can unemployed people file taxes Additional tax. Can unemployed people file taxes   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. Can unemployed people file taxes Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes Exceptions. Can unemployed people file taxes   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. Can unemployed people file taxes Balance in an HSA An HSA is generally exempt from tax. Can unemployed people file taxes You are permitted to take a distribution from your HSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Can unemployed people file taxes Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). Can unemployed people file taxes Earnings on amounts in an HSA are not included in your income while held in the HSA. Can unemployed people file taxes Death of HSA Holder You should choose a beneficiary when you set up your HSA. Can unemployed people file taxes What happens to that HSA when you die depends on whom you designate as the beneficiary. Can unemployed people file taxes Spouse is the designated beneficiary. Can unemployed people file taxes   If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse's HSA after your death. Can unemployed people file taxes Spouse is not the designated beneficiary. Can unemployed people file taxes   If your spouse is not the designated beneficiary of your HSA: The account stops being an HSA, and The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. Can unemployed people file taxes If your estate is the beneficiary, the value is included on your final income tax return. Can unemployed people file taxes The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. Can unemployed people file taxes Filing Form 8889 You must file Form 8889 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your HSA during the year. Can unemployed people file taxes You must file the form even if only your employer or your spouse's employer made contributions to the HSA. Can unemployed people file taxes If, during the tax year, you are the beneficiary of two or more HSAs or you are a beneficiary of an HSA and you have your own HSA, you must complete a separate Form 8889 for each HSA. Can unemployed people file taxes Enter “statement” at the top of each Form 8889 and complete the form as instructed. Can unemployed people file taxes Next, complete a controlling Form 8889 combining the amounts shown on each of the statement Forms 8889. Can unemployed people file taxes Attach the statements to your tax return after the controlling Form 8889. Can unemployed people file taxes Employer Participation This section contains the rules that employers must follow if they decide to make HSAs available to their employees. Can unemployed people file taxes Unlike the previous discussions, “you” refers to the employer and not to the employee. Can unemployed people file taxes Health plan. Can unemployed people file taxes   If you want your employees to be able to have an HSA, they must have an HDHP. Can unemployed people file taxes You can provide no additional coverage other than those exceptions listed previously under Other health coverage . Can unemployed people file taxes Contributions. Can unemployed people file taxes   You can make contributions to your employees' HSAs. Can unemployed people file taxes You deduct the contributions on your business income tax return for the year in which you make the contributions. Can unemployed people file taxes If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. Can unemployed people file taxes   For more information on employer contributions, see Notice 2008-59, 2008-29 I. Can unemployed people file taxes R. Can unemployed people file taxes B. Can unemployed people file taxes 123, questions 23 through 27, available at www. Can unemployed people file taxes irs. Can unemployed people file taxes gov/irb/2008-29_IRB/ar11. Can unemployed people file taxes html. Can unemployed people file taxes Comparable contributions. Can unemployed people file taxes   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs. Can unemployed people file taxes Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. Can unemployed people file taxes The comparability rules do not apply to contributions made through a cafeteria plan. Can unemployed people file taxes Comparable participating employees. Can unemployed people file taxes   Comparable participating employees: Are covered by your HDHP and are eligible to establish an HSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (part-time, full-time, or former employees). Can unemployed people file taxes   To meet the comparability requirements for eligible employees who have not established an HSA by December 31 or have not notified you that they have an HSA, you must meet a notice requirement and a contribution requirement. Can unemployed people file taxes   You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. Can unemployed people file taxes The notice must state that each eligible employee who, by the last day of February, establishes an HSA and notifies you that they have established an HSA will receive a comparable contribution to the HSA for the prior year. Can unemployed people file taxes For a sample of the notice, see Regulation 54. Can unemployed people file taxes 4980G-4 A-14(c). Can unemployed people file taxes You will meet the contribution requirement for these employees if by April 15, 2014, you contribute comparable amounts plus reasonable interest to the employee's HSA for the prior year. Can unemployed people file taxes Note. Can unemployed people file taxes For purposes of making contributions to HSAs of non-highly compensated employees, highly compensated employees shall not be treated as comparable participating employees. Can unemployed people file taxes Excise tax. Can unemployed people file taxes   If you made contributions to your employees' HSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. Can unemployed people file taxes Employment taxes. Can unemployed people file taxes   Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. Can unemployed people file taxes You must report the contributions in box 12 of the Form W-2 you file for each employee. Can unemployed people file taxes This includes the amounts the employee elected to contribute through a cafeteria plan. Can unemployed people file taxes Enter code “W” in box 12. Can unemployed people file taxes Medical Savings Accounts (MSAs) Archer MSAs were created to help self-employed individuals and employees of certain small employers meet the medical care costs of the account holder, the account holder's spouse, or the account holder's dependent(s). Can unemployed people file taxes After December 31, 2007, you cannot be treated as an eligible individual for Archer MSA purposes unless: You were an active participant for any tax year ending before January 1, 2008, or You became an active participant for a tax year ending after December 31, 2007, by reason of coverage under a high deductible health plan (HDHP) of an Archer MSA participating employer. Can unemployed people file taxes A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is eligible for Medicare. Can unemployed people file taxes Archer MSAs An Archer MSA is a tax-exempt trust or custodial account that you set up with a U. Can unemployed people file taxes S. Can unemployed people file taxes financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses. Can unemployed people file taxes What are the benefits of an Archer MSA?   You may enjoy several benefits from having an Archer MSA. Can unemployed people file taxes You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR. Can unemployed people file taxes The interest or other earnings on the assets in your Archer MSA are tax free. Can unemployed people file taxes Distributions may be tax free if you pay qualified medical expenses. Can unemployed people file taxes See Qualified medical expenses , later. Can unemployed people file taxes The contributions remain in your Archer MSA from year to year until you use them. Can unemployed people file taxes An Archer MSA is “portable” so it stays with you if you change employers or leave the work force. Can unemployed people file taxes Qualifying for an Archer MSA To qualify for an Archer MSA, you must be either of the following. Can unemployed people file taxes An employee (or the spouse of an employee) of a small employer (defined later) that maintains a self-only or family HDHP for you (or your spouse). Can unemployed people file taxes A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP. Can unemployed people file taxes You can have no other health or Medicare coverage except what is permitted under Other health coverage , later. Can unemployed people file taxes You must be an eligible individual on the first day of a given month to get an Archer MSA deduction for that month. Can unemployed people file taxes If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an Archer MSA contribution. Can unemployed people file taxes This is true even if the other person does not actually claim your exemption. Can unemployed people file taxes Small employer. Can unemployed people file taxes   A small employer is generally an employer who had an average of 50 or fewer employees during either of the last 2 calendar years. Can unemployed people file taxes The definition of small employer is modified for new employers and growing employers. Can unemployed people file taxes Growing employer. Can unemployed people file taxes   A small employer may begin HDHPs and Archer MSAs for his or her employees and then grow beyond 50 employees. Can unemployed people file taxes The employer will continue to meet the requirement for small employers if he or she: Had 50 or fewer employees when the Archer MSAs began, Made a contribution that was excludable or deductible as an Archer MSA for the last year he or she had 50 or fewer employees, and Had an average of 200 or fewer employees each year after 1996. Can unemployed people file taxes Changing employers. Can unemployed people file taxes   If you change employers, your Archer MSA moves with you. Can unemployed people file taxes However, you may not make additional contributions unless you are otherwise eligible. Can unemployed people file taxes High deductible health plan (HDHP). Can unemployed people file taxes   To be eligible for an Archer MSA, you must be covered under an HDHP. Can unemployed people file taxes An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the annual out-of-pocket medical expenses that you must pay for covered expenses. Can unemployed people file taxes Limits. Can unemployed people file taxes   The following table shows the limits for annual deductibles and the maximum out-of-pocket expenses for HDHPs for 2013. Can unemployed people file taxes   Self-only coverage Family coverage Minimum annual deductible $2,150 $4,300 Maximum annual deductible $3,200 $6,450 Maximum annual out-of-pocket expenses $4,300 $7,850 Family plans that do not meet the high deductible rules. Can unemployed people file taxes   There are some family plans that have deductibles for both the family as a whole and for individual family members. Can unemployed people file taxes Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. Can unemployed people file taxes If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. Can unemployed people file taxes Example. Can unemployed people file taxes You have family health insurance coverage in 2013. Can unemployed people file taxes The annual deductible for the family plan is $5,500. Can unemployed people file taxes This plan also has an individual deductible of $2,000 for each family member. Can unemployed people file taxes The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($4,300) for family coverage. Can unemployed people file taxes Other health coverage. Can unemployed people file taxes   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. Can unemployed people file taxes However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. Can unemployed people file taxes However, you can have additional insurance that provides benefits only for the following items. Can unemployed people file taxes Liabilities incurred under workers' compensation laws, torts, or ownership or use of property. Can unemployed people file taxes A specific disease or illness. Can unemployed people file taxes A fixed amount per day (or other period) of hospitalization. Can unemployed people file taxes You can also have coverage (whether provided through insurance or otherwise) for the following items. Can unemployed people file taxes Accidents. Can unemployed people file taxes Disability. Can unemployed people file taxes Dental care. Can unemployed people file taxes Vision care. Can unemployed people file taxes Long-term care. Can unemployed people file taxes Contributions to an MSA Contributions to an Archer MSA must be made in cash. Can unemployed people file taxes You cannot contribute stock or other property to an Archer MSA. Can unemployed people file taxes Who can contribute to my Archer MSA?   If you are an employee, your employer may make contributions to your Archer MSA. Can unemployed people file taxes (You do not pay tax on these contributions. Can unemployed people file taxes ) If your employer does not make contributions to your Archer MSA, or you are self-employed, you can make your own contributions to your Archer MSA. Can unemployed people file taxes Both you and your employer cannot make contributions to your Archer MSA in the same year. Can unemployed people file taxes You do not have to make contributions to your Archer MSA every year. Can unemployed people file taxes    If your spouse is covered by your HDHP and an excludable amount is contributed by your spouse's employer to an Archer MSA belonging to your spouse, you cannot make contributions to your own Archer MSA that year. Can unemployed people file taxes Limits There are two limits on the amount you or your employer can contribute to your Archer MSA: The annual deductible limit. Can unemployed people file taxes An income limit. Can unemployed people file taxes Annual deductible limit. Can unemployed people file taxes   You (or your employer) can contribute up to 75% of the annual deductible of your HDHP (65% if you have a self-only plan) to your Archer MSA. Can unemployed people file taxes You must have the HDHP all year to contribute the full amount. Can unemployed people file taxes If you do not qualify to contribute the full amount for the year, determine your annual deductible limit by using the worksheet in the Instructions for Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Can unemployed people file taxes Example 1. Can unemployed people file taxes You have an HDHP for your family all year in 2013. Can unemployed people file taxes The annual deductible is $5,000. Can unemployed people file taxes You can contribute up to $3,750 ($5,000 × 75%) to your Archer MSA for the year. Can unemployed people file taxes Example 2. Can unemployed people file taxes You have an HDHP for your family for the entire months of July through December 2013 (6 months). Can unemployed people file taxes The annual deductible is $5,000. Can unemployed people file taxes You can contribute up to $1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the year. Can unemployed people file taxes If you and your spouse each have a family plan, you are treated as having family coverage with the lower annual deductible of the two health plans. Can unemployed people file taxes The contribution limit is split equally between you unless you agree on a different division. Can unemployed people file taxes Income limit. Can unemployed people file taxes   You cannot contribute more than you earned for the year from the employer through whom you have your HDHP. Can unemployed people file taxes   If you are self-employed, you cannot contribute more than your net self-employment income. Can unemployed people file taxes This is your income from self-employment minus expenses (including the deductible part of self-employment tax). Can unemployed people file taxes Example 1. Can unemployed people file taxes Noah Paul earned $25,000 from ABC Company in 2013. Can unemployed people file taxes Through ABC, he had an HDHP for his family for the entire year. Can unemployed people file taxes The annual deductible was $5,000. Can unemployed people file taxes He can contribute up to $3,750 to his Archer MSA (75% × $5,000). Can unemployed people file taxes He can contribute the full amount because he earned more than $3,750 at ABC. Can unemployed people file taxes Example 2. Can unemployed people file taxes Westley Lawrence is self-employed. Can unemployed people file taxes He had an HDHP for his family for the entire year in 2013. Can unemployed people file taxes The annual deductible was $5,000. Can unemployed people file taxes Based on the annual deductible, the maximum contribution to his Archer MSA would have been $3,750 (75% × $5,000). Can unemployed people file taxes However, after deducting his business expenses, Joe's net self-employment income is $2,500 for the year. Can unemployed people file taxes Therefore, he is limited to a contribution of $2,500. Can unemployed people file taxes Individuals enrolled in Medicare. Can unemployed people file taxes   Beginning with the first month you are enrolled in Medicare, you cannot contribute to an Archer MSA. Can unemployed people file taxes However, you may be eligible for a Medicare Advantage MSA, discussed later. Can unemployed people file taxes When To Contribute You can make contributions to your Archer MSA for 2013 until April 15, 2014. Can unemployed people file taxes Reporting Contributions on Your Return Report all contributions to your Archer MSA on Form 8853 and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes You should include all contributions you, or your employer, made for 2013, including those made by April 15, 2014, that are designated for 2013. Can unemployed people file taxes You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount you (or your employer) contributed during the year. Can unemployed people file taxes Your employer's contributions should be shown in box 12 of Form W-2, Wage and Tax Statement, with code R. Can unemployed people file taxes Follow the instructions for Form 8853 and complete the worksheet in the instructions. Can unemployed people file taxes Report your Archer MSA deduction on Form 1040 or Form 1040NR. Can unemployed people file taxes Excess contributions. Can unemployed people file taxes   You will have excess contributions if the contributions to your Archer MSA for the year are greater than the limits discussed earlier. Can unemployed people file taxes Excess contributions are not deductible. Can unemployed people file taxes Excess contributions made by your employer are included in your gross income. Can unemployed people file taxes If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Can unemployed people file taxes   Generally, you must pay a 6% excise tax on excess contributions. Can unemployed people file taxes See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. Can unemployed people file taxes The excise tax applies to each tax year the excess contribution remains in the account. Can unemployed people file taxes   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. Can unemployed people file taxes You withdraw the excess contributions by the due date, including extensions, of your tax return. Can unemployed people file taxes You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. Can unemployed people file taxes Deducting an excess contribution in a later year. Can unemployed people file taxes   You may be able to deduct excess contributions for previous years that are still in your Archer MSA. Can unemployed people file taxes The excess contribution you can deduct in the current year is the lesser of the following two amounts. Can unemployed people file taxes Your maximum Archer MSA contribution limit for the year minus any amounts contributed to your Archer MSA for the year. Can unemployed people file taxes The total excess contributions in your Archer MSA at the beginning of the year. Can unemployed people file taxes   Any excess contributions remaining at the end of a tax year are subject to the excise tax. Can unemployed people file taxes See Form 5329. Can unemployed people file taxes Distributions From an MSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. Can unemployed people file taxes When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your Archer MSA to send you a distribution from your Archer MSA. Can unemployed people file taxes You can receive tax-free distributions from your Archer MSA to pay for qualified medical expenses (discussed later). Can unemployed people file taxes If you receive distributions for other reasons, the amount will be subject to income tax and may be subject to an additional 20% tax as well. Can unemployed people file taxes You do not have to make withdrawals from your Archer MSA each year. Can unemployed people file taxes If you no longer qualify to make contributions, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. Can unemployed people file taxes A distribution is money you get from your Archer MSA. Can unemployed people file taxes The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Can unemployed people file taxes Qualified medical expenses. Can unemployed people file taxes   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. Can unemployed people file taxes These are explained in Publication 502. Can unemployed people file taxes   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for MSA purposes. Can unemployed people file taxes A medicine or drug will be a qualified medical expense for MSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. Can unemployed people file taxes   Qualified medical expenses are those incurred by the following persons. Can unemployed people file taxes You and your spouse. Can unemployed people file taxes All dependents you claim on your tax return. Can unemployed people file taxes Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Can unemployed people file taxes    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Can unemployed people file taxes    You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your Archer MSA. Can unemployed people file taxes Special rules for insurance premiums. Can unemployed people file taxes   Generally, you cannot treat insurance premiums as qualified medical expenses for Archer MSAs. Can unemployed people file taxes You can, however, treat premiums for long-term care coverage, health care coverage while you receive unemployment benefits, or health care continuation coverage required under any federal law as qualified medical expenses for Archer MSAs. Can unemployed people file taxes Health coverage tax credit. Can unemployed people file taxes   You cannot claim this credit for premiums that you pay with a tax-free distribution from your Archer MSA. Can unemployed people file taxes See Publication 502 for information on this credit. Can unemployed people file taxes Deemed distributions from Archer MSAs. Can unemployed people file taxes   The following situations result in deemed taxable distributions from your Archer MSA. Can unemployed people file taxes You engaged in any transaction prohibited by section 4975 with respect to any of your Archer MSAs at any time in 2013. Can unemployed people file taxes Your account ceases to be an Archer MSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8853. Can unemployed people file taxes You used any portion of any of your Archer MSAs as security for a loan at any time in 2013. Can unemployed people file taxes You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. Can unemployed people file taxes   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the Archer MSA, Lending of money between you and the Archer MSA, Furnishing goods, services, or facilities between you and the Archer MSA, and Transfer to or use by you, or for your benefit, of any assets of the Archer MSA. Can unemployed people file taxes   Any deemed distribution will not be treated as used to pay qualified medical expenses. Can unemployed people file taxes These distributions are included in your income and are subject to the additional 20% tax, discussed later. Can unemployed people file taxes Recordkeeping. Can unemployed people file taxes You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. Can unemployed people file taxes Do not send these records with your tax return. Can unemployed people file taxes Keep them with your tax records. Can unemployed people file taxes Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). Can unemployed people file taxes If you use a distribution from your Archer MSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8853. Can unemployed people file taxes Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes If you do not use a distribution from your Archer MSA for qualified medical expenses, you must pay tax on the distribution. Can unemployed people file taxes Report the amount on Form 8853 and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes You may have to pay an additional 20% tax, discussed later, on your taxable distribution. Can unemployed people file taxes If an amount (other than a rollover) is contributed to your Archer MSA this year (by you or your employer), you also must report and pay tax on a distribution you receive from your Archer MSA this year that is used to pay medical expenses of someone who is not covered by an HDHP, or is also covered by another health plan that is not an HDHP, at the time the expenses are incurred. Can unemployed people file taxes Rollovers. Can unemployed people file taxes   Generally, any distribution from an Archer MSA that you roll over into another Archer MSA or an HSA is not taxable if you complete the rollover within 60 days. Can unemployed people file taxes An Archer MSA and an HSA can only receive one rollover contribution during a 1-year period. Can unemployed people file taxes See the Form 8853 instructions for more information. Can unemployed people file taxes Additional tax. Can unemployed people file taxes   There is a 20% additional tax on the part of your distributions not used for qualified medical expenses. Can unemployed people file taxes Figure the tax on Form 8853 and file it with your Form 1040 or Form 1040NR. Can unemployed people file taxes Report the additional tax in the total on Form 1040 or Form 1040NR. Can unemployed people file taxes Exceptions. Can unemployed people file taxes   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. Can unemployed people file taxes Balance in an Archer MSA An Archer MSA is generally exempt from tax. Can unemployed people file taxes You are permitted to take a distribution from your Archer MSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Can unemployed people file taxes Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). Can unemployed people file taxes Earnings on amounts in an Archer MSA are not included in your income while held in the Archer MSA. Can unemployed people file taxes Death of the Archer MSA Holder You should choose a beneficiary when you set up your Archer MSA. Can unemployed people file taxes What happens to that Archer MSA when you die depends on whom you designate as the beneficiary. Can unemployed people file taxes Spouse is the designated beneficiary. Can unemployed people file taxes   If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. Can unemployed people file taxes Spouse is not the designated beneficiary. Can unemployed people file taxes   If your spouse is not the designated beneficiary of your Archer MSA: The account stops being an Archer MSA, and The fair market value of the Archer MSA becomes taxable to the beneficiary in the year in which you die. Can unemployed people file taxes   If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return. Can unemployed people file taxes The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. Can unemployed people file taxes Filing Form 8853 You must file Form 8853 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your Archer MSA during the year. Can unemployed people file taxes You must file the form even if only your employer or your spouse's employer made contributions to the Archer MSA. Can unemployed people file taxes If, during the tax year, you are the beneficiary of two or more Archer MSAs or you are a beneficiary of an Archer MSA and you have your own Archer MSA, you must complete a separate Form 8853 for each MSA. Can unemployed people file taxes Enter “statement” at the top of each Form 8853 and complete the form as instructed. Can unemployed people file taxes Next, complete a controlling Form 8853 combining the amounts shown on each of the statement Forms 8853. Can unemployed people file taxes Attach the statements to your tax return after the controlling Form 8853. Can unemployed people file taxes Employer Participation This section contains the rules that employers must follow if they decide to make Archer MSAs available to their employees. Can unemployed people file taxes Unlike the previous discussions, “you” refers to the employer and not to the employee. Can unemployed people file taxes Health plan. Can unemployed people file taxes   If you want your employees to be able to have an Archer MSA, you must make an HDHP available to them. Can unemployed people file taxes You can provide no additional coverage other than those exceptions listed previously under Other health coverage . Can unemployed people file taxes Contributions. Can unemployed people file taxes   You can make contributions to your employees' Archer MSAs. Can unemployed people file taxes You deduct the contributions on the “Employee benefit programs” line of your business income tax return for the year in which you make the contributions. Can unemployed people file taxes If you are filing Form 1040, Schedule C, this is Part II, line 14. Can unemployed people file taxes Comparable contributions. Can unemployed people file taxes   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' Archer MSAs. Can unemployed people file taxes Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. Can unemployed people file taxes Comparable participating employees. Can unemployed people file taxes   Comparable participating employees: Are covered by your HDHP and are eligible to establish an Archer MSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (either part-time or full-time). Can unemployed people file taxes Excise tax. Can unemployed people file taxes   If you made contributions to your employees' Archer MSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. Can unemployed people file taxes Employment taxes. Can unemployed people file taxes   Amounts you contribute to your employees' Archer MSAs are generally not subject to employment taxes. Can unemployed people file taxes You must report the contributions in box 12 of the Form W-2 you file for each employee. Can unemployed people file taxes Enter code “R” in box 12. Can unemployed people file taxes Medicare Advantage MSAs A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. Can unemployed people file taxes To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare and have a high deductible health plan (HDHP) that meets the Medicare guidelines. Can unemployed people file taxes A Medicare Advantage MSA is a tax-exempt trust or custodial savings account that you set up with a financial institution (such as a bank or an insurance company) in which the Medicare program can deposit money for qualified medical expenses. Can unemployed people file taxes The money in your account is not taxed if it is used for qualified medical expenses, and it may earn interest or dividends. Can unemployed people file taxes An HDHP is a special health insurance policy that has a high deductible. Can unemployed people file taxes You choose the policy you want to use as part of your Medicare Advantage MSA plan. Can unemployed people file taxes However, the policy must be approved by the Medicare program. Can unemployed people file taxes Medicare Advantage MSAs are administered through the federal Medicare program. Can unemployed people file taxes You can get information by calling 1-800-Medicare (1-800-633-4227) or through the Internet at www. Can unemployed people file taxes medicare. Can unemployed people file taxes gov. Can unemployed people file taxes Note. Can unemployed people file taxes You must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your tax return if you have a Medicare Advantage MSA. Can unemployed people file taxes Flexible Spending Arrangements (FSAs) A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. Can unemployed people file taxes FSAs are usually funded through voluntary salary reduction agreements with your employer. Can unemployed people file taxes No employment or federal income taxes are deducted from your contribution. Can unemployed people file taxes The employer may also contribute. Can unemployed people file taxes Note. Can unemployed people file taxes Unlike HSAs or Archer MSAs which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for FSAs on your income tax return. Can unemployed people file taxes For information on the interaction between a health FSA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier. Can unemployed people file taxes What are the benefits of an FSA?   You may enjoy several benefits from having an FSA. Can unemployed people file taxes Contributions made by your employer can be excluded from your gross income. Can unemployed people file taxes No employment or federal income taxes are deducted from the contributions. Can unemployed people file taxes Withdrawals may be tax free if you pay qualified medical expenses. Can unemployed people file taxes See Qualified medical expenses , later. Can unemployed people file taxes You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. Can unemployed people file taxes Qualifying for an FSA Health FSAs are employer-established benefit plans. Can unemployed people file taxes These may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. Can unemployed people file taxes Employers have complete flexibility to offer various combinations of benefits in designing their plan. Can unemployed people file taxes You do not have to be covered under any other health care plan to participate. Can unemployed people file taxes Self-employed persons are not eligible for an FSA. Can unemployed people file taxes Certain limitations may apply if you are a highly compensated participant or a key employee. Can unemployed people file taxes Contributions to an FSA You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. Can unemployed people file taxes This is sometimes called a salary reduction agreement. Can unemployed people file taxes The employer may also contribute to your FSA if specified in the plan. Can unemployed people file taxes You do not pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. Can unemployed people file taxes However, contributions made by your employer to provide coverage for long-term care insurance must be included in income. Can unemployed people file taxes When To Contribute At the