IRS Form 5498-SA is a document of importance to anyone who participates in or manages a health savings account (HSA), Archer Medical Savings Account (MSA) or Medicare Advantage (MA MSA). Each year, account trustees must provide copies of the form to both the IRS and the participating employees.
Table of Contents
What is Form 5498-SA used for?
The purpose of Form 5498-SA is to report how much money is contributed to an HSA, Archer MSA or MA MSA over the course of a tax year. In the case of HSAs and Archer MSAs, the tax year extends to April 15 of the following year. For example, a Form 5498-SA filed for 2022 may include contributions made between January 1 and April 15, 2023.
Why is IRS Form 5498-SA received in May?
The deadline each year for trustees to provide HSA, Archer MSA or MA MSA participants with a copy of Form 5498-SA is May 31.
Do HSA contributions need to be reported?
Employees who participate in an HSA, Archer MSA or MA MSA do not need to file Form 5498-SA with the IRS. That responsibility falls to the account trustees.
Does the money used or received from an HSA need to be reported?
Trustees are also required to report distributions from an HSA, Archer MSA or MA MSA. Reporting is done using Form 1099-SA, a copy of which is provided to the account participant.
The participants must then file either Form 8853 or Form 8889, regardless of whether the distributions were subject to taxes. Distributions may be considered taxable income and will have to be reported on an individual income tax return (Form 1040) if one of the following occurs:
- Distributed funds were used to pay for unqualified medical expenses
- The HSA or Archer MSA account balance was not rolled over from the prior year
- An estate or non-spouse beneficiary inherited the fair market value of the account
What if employers contribute to an HSA/Archer MSA/MA MSA?
Rules governing contributions vary based on the type of savings account. Here are the basics:
Both employees and their employers may contribute to an HSA in the same year. The participant’s individual contributions are tax deductible.
- Archer MSA
Employee contributions to an Archer MSA, like an HSA, reduce taxable income. Employers can also contribute, but if they do, the employee cannot contribute to any Archer MSA for that year. Other restrictions apply if the employee is covered under a spouse’s high deductible health plan.
- MA MSA
Neither employers nor employees can contribute to an MA MSA. Contributions are made by Medicare or the Social Security Administration.
What should be done with IRS Form 5498-SA?
As previously mentioned, trustees must file Form 5498-SA with the IRS on time and provide a copy to plan participants, who may want to save it with their other tax records. If participants need help deciphering the form, they should contact the account trustee or a licensed tax attorney for additional support.
How to access the form
Form 5498-SA is available to trustees online via the IRS website and can be filed electronically.
How to complete Form 5498-SA
Trustees who are responsible for filing Form 5498-SA generally follow these instructions from the IRS:
- Provide identifying information about the trustee and the participant.
- Enter employee or self-employed contributions to an Archer MSA in box 1.
- Enter total Archer MSA or HSA contributions in boxes 2* and 3 for the years specified.
- Enter rollover contributions to an HSA or Archer MSA in box 4.
- Enter the fair market value of the HSA, Archer MSA or MA MSA in box 5.
- Check off the account type (HSA, Archer MSA or MA MSA) in box 6.
*Note that trustees may list total contributions made by government agencies to an MA MSA in box 2, but are not required to do so.
What special circumstances can affect Form 5498-SA?
Completing Form 5498-SA in itself is fairly basic. But circumstances sometimes arise that impact how an HSA, Archer MSA or MA MSA is managed. Examples include:
Rollovers are permitted between an Archer MSA and another Archer MSA, an Archer MSA and an HSA, and an HSA and another HSA. Participants who don’t roll over any remaining account balance at year’s end may be charged income tax.
Most trustee-to-trustee transfers are not considered contributions or rollovers and do not get reported on Form 5498-SA. The one exception is a trustee-to-trustee transfer from an individual retirement account (IRA) to an HSA.
- Total distribution, no contributions
If no contributions are made to an HSA or Archer MSA during a given year and any remaining account balance is distributed, the trustee generally does not have to file Form 5498-SA.
- Death of account holder
Special rules apply when an account holder dies. If the surviving beneficiary is a spouse, that person becomes the account holder of an HSA or Archer MSA, but not an MA MSA. The IRS distributes MA MSAs as if they were Archer MSAs and does not permit the spouse to make any new contributions. If the beneficiary is someone other than a spouse or an estate, the fair market value is distributed as income.
Frequently asked questions about Form 5498-SA
How does Form 5498-SA affect taxes?
Employee contributions to an HSA or an Archer MSA reduce taxable income. Form 5498-SA summarizes these contributions, but has no direct impact on taxability.
Where does Form 5498-SA go on a tax return?
Participants of an HSA, Archer MSA or MA MSA do not have to file Form 5498-SA with their individual income tax return. However, if distributions from any of these accounts were taxable, they should be noted on Schedule 1 of Form 1040, Part I, line 8e.
Does Form 5498-SA include employer contributions?
Form 5498-SA documents total contributions. Employer contributions, if any, are noted on Form W-2, box 12. Code R applies to an Archer MSA and Code W applies to an HSA.
Why does my Form 5498-SA not match my Form W-2?
Contributions made on a post-tax basis or between January 1 and the previous year’s tax due date may result in a Form 5498-SA that has different information from Form W-2.
What is the difference between Form 1099-SA and Form 5498-SA?
Form 1099-SA reports distributions from an HSA, Archer MSA or MA MSA, whereas Form 5498-SA reports contributions to any of those accounts.
Do I need both Form 1099-SA and Form 5498-SA?
Trustees are required to provide participants with both Form 1099-SA and 5498-SA. Form 1099-SA is of particular importance because participants use information from that document to report any distributions they received from an HSA, Archer MSA or MA MSA to the IRS.
What is Box 5 on Form 5498-SA?
Box 5 displays the fair market value of an HSA, Archer MSA or MA MSA as of December 31.
What is Box 2 on Form 5498-SA?
Box 2 lists the total contributions made to an HSA or Archer MSA for the current year. It should not include rollovers, which are noted in Box 4.
This article is intended to be used as a starting point in analyzing Form 5498-SA and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.