What are Forms 1099-SA and 5498-SA?
Form 1099-SA, Distributions From a Health Savings Account (HSA), Archer Medical Savings Account (MSA) or Medicare Advantage MSA, and Form 5498-SA, HSA, Archer MSA or Medicare Advantage (MA) MSA Information, are tax information reporting documents related to health savings accounts. These forms are tied together because Form 1099-SA is used to report distributions to an account, and Form 5498-SA is designated for reporting contributions.
The forms are noted on the same set of instructions with specific details for each. Here is an overview of the reporting requirements for each form:
This document is to be completed by the entity making the distribution. Reporting is to occur for each type of account, and the requirement applies whether the entity paid the funds to the account holder or directly to the medical service provider. Additionally, distributions must be reported if an HSA is closed and the account holder didn't meet the requirements of the Customer Identification Program under the USA Patriot Act.
The IRS does have one exception that applies to transfers.
"Do not report a trustee-to-trustee transfer from one Archer MSA or MA MSA to another Archer MSA or MA MSA, one Archer MSA to an HSA, or from one HSA to another HSA," the form instructions read. "For reporting purposes, contributions and rollovers do not include transfers."
The IRS also has special provisions in the event an account holder dies. Typically, spouses become the account holder, and if the account is an MA MSA, it becomes an Archer MSA and is subject to the appropriate rules.
If the account lacks a designated beneficiary or the holder's spouse is not the beneficiary, the account is no longer treated as a savings account. Instead, the fair market value is reported on Form 1099-SA and allocated to the appropriate recipients.
Issuers must submit this form to the IRS by Feb. 28 and to recipients by Jan. 31.
Contributions to any of the aforementioned savings plans are detailed on this form by trustees or custodians, and a separate form is required for each type of account. The same transfer rules apply to Form 5498-SA, but rollovers are not exempt from reporting. One instance when reporting isn't required is if a total distribution occurs during the year but no contributions are made.
The same provisions apply regarding the death of an account holder.
For more information about Forms 1099-SA and 5498-SA, check out our education section.