Updated October 18, 2026. Quick answer: Line 17a is a check box for taxable HSA distributions that meet an exception to the additional 20% tax. Line 17b is 20% of the taxable amount on line 16 that does not meet an exception. Line 17b is carried to Schedule 2.
What lines 17a and 17b ask for
Line 17a reads “If any of the distributions included on line 16 meet any of the Exceptions to the Additional 20% Tax (see instructions), check here”. Line 17b reads “Additional 20% tax (see instructions). Enter 20% (0.20) of the distributions included on line 16 that are subject to the additional 20% tax.”
The exceptions
The instructions open with “HSA distributions included in income (line 16) are subject to an additional 20% tax unless one of the following exceptions applies.” The list is “The additional 20% tax does not apply to distributions made after the account beneficiary:” The bullets that follow start with the beneficiary dying, then “Becomes disabled or” “Turns age 65.”
Age 65 and Medicare interact in several ways, covered on the HSA after 65 page. The general statement elsewhere in the instructions is “Any part of a distribution not used to pay qualified medical expenses is includible in gross income and is subject to an additional 20% tax unless an exception applies.”
Where the number comes from
The instructions say “If any of the exceptions apply to any of the distributions included on line 16, check the box on line 17a.” For the amount: “Enter on line 17b only 20% (0.20) of any amount included on line 16 that does not meet any of the exceptions.” The line 16 amount comes from the Form 8889 lines 15 and 16 page.
The instructions also list situations treated as distributions: “Any deemed distribution will not be treated as used to pay qualified medical expenses. Generally, these distributions are subject to the additional 20% tax.”
Where it goes next
The form says line 17b is “Also, include this amount in the total on Schedule 2 (Form 1040), Part II, line 17c”. That Schedule 2 line is explained on the Schedule 2 lines 17c to 17f page, and the schedule attaches to Form 1040.
Edition and line numbers
This page reads the 2025 Form 8889 and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form says “Attach to Form 1040, 1040-SR, or 1040-NR.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently. The form itself is walked through on the Form 8889 page.
Common mistakes
- Applying the 20% to every dollar on line 16 when part meets an exception. The instructions say to enter “only 20% (0.20) of any amount included on line 16 that does not meet any of the exceptions.”
- Forgetting to check line 17a when an exception applies. The instructions say “check the box on line 17a.”
- Assuming an exception applies before the event. The exceptions apply to “distributions made after the account beneficiary” reaches one of the listed events, not before.
Related: Form 8889, Schedule 2 lines 17c to 17f, HSA after 65, and Form 1099-SA box 3.
Sources
- Instructions for Form 8889, Health Savings Accounts (2025): https://www.irs.gov/pub/irs-pdf/i8889.pdf
- Form 8889, Health Savings Accounts (HSAs) (2025): https://www.irs.gov/pub/irs-pdf/f8889.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.