Question

Do I have report a schedule K-1 that I received for a health savings account?

Forum|Forum|1 year ago
March 18, 2025
2 replies
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Under type of entity (line I1), "individual" is indicated, and the box on line I2 is not checked.

Yes. See HSA with a K-1 statement - TurboTax Support - Intuit

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L

llmorrAuthor

The post referred to describes a different scenario. In that post, a partnership had contributed money to an individual's HSA account. In my case, in my HSA account I purchased shares of a company that is organized as a partnership, and I was sent a schedule K-1 (form 1065) reporting my share of the current year's income, etc. Under type of entity (line I1), "individual" is indicated, and the box on line I2 is not checked. I was under the impression that an HSA is considered a type of retirement account, and that schedule K-1s received did not need to be reported.

In this same HSA account, I own shares of another company that is also organized as a partnership, and on the K-1 that I received from that company, under type of entity (line I1), "Pension Plan" is indicated, and the box on line I2 is checked.

B

BillM223

"an HSA is considered a type of retirement account"

No, it is a "Health Savings Account", not a retirement account. Indeed, the Supreme Court of Ohio specifically ruled that the HSA was not a retirement account, so was not subject to being divided between spouses who were divorcing.

It has similarities to an IRA, but it is not one.

As for your original question, the K-1s don't need to be reported because you don't report earnings in an HSA (yes, like a retirement account), even when you distribute them.

There is not a way in TurboTax to report a K-1 distribution into an HSA, even if you wanted to do it.

So I would just ignore the entries on the K-1s and declare victory since it really doesn't matter to you what their paperwork says.

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D

dmertz

It seems that the partnership has not properly identified the entity type of the partner. Your HSA is the partner, not you. Box I1 probably should have indicated HSA as the entity along with box I2 being marked. An HSA is treated similarly to an IRA.

If a Schedule K-1 (Form 1065) shows an amount with code V in box 20 for UBTI and the total of the code V amounts of all similar investments held by the HSA is more than $1,000, the HSA must file Form 990-T and pay UBIT. This UBTI is an internal expense of the HSA, not a distribution, so it simply reduces the balance of the HSA. See the instructions for From 990-T:

https://www.irs.gov/pub/irs-pdf/i990t.pdf