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How To Understand Your 1099-SA Form

How To Understand Your 1099-SA Form

 

Each year, HSA providers are required to send a copy of Form 1099-SA by January 31st to all HSA accountholders who made withdrawals (also called distributions) in the prior year. Form 1099-SA shows all HSA distributions for the prior year, including withdrawals for qualified medical expenses, withdrawals for non-qualified expenses, and removals of excess contributions.

Form 1099-SA helps HSA accountholders report their HSA withdrawals in the prior year to the IRS on their tax returns.

Here’s how to understand your Form 1099-SA for the 2018 tax year:

Box 1: Shows the total amount of withdrawals from your HSA in 2018, including HSA rollovers (but not HSA transfers).

Box 2: If you made an excess HSA contribution in 2018 and withdrew that excess contribution by April 15th, 2019, earnings from that excess HSA contribution are shown here (they will also be in Box 1).

Box 3: Shows one of the below distribution codes:

  • 1 (Normal distributions): This code refers to regular HSA distributions and any direct payments to a medical service provider.
  • 2 (Excess contributions): This code refers to excess HSA contributions that were distributed back to you (the accountholder).
  • 3 (Disability): This code refers to distributions made after the accountholder was disabled.
  • 4 (Death distribution): This code refers to payments to a deceased accountholder’s estate in the year of death or after the year of death.
  • 5 (Prohibited transaction): This code refers to a prohibited transaction made using HSA funds (see questions 34 – 37 on IRS Notice 2008-59 for a list of prohibited HSA transactions).
  • 6 (Death distribution after year of death to a non-spouse beneficiary): This code refers to payments to a deceased accountholder’s non-spouse beneficiary, other than an estate, after the year of death.

Box 4: Shows the fair market value (FMV) of the HSA on the accountholder’s date of death, if applicable.

Box 5: Shows what type of medical savings account you have.

Form 1099-SA FAQs:

Q: Why didn’t I receive a Form 1099-SA?
A: If you didn’t make any withdrawals from your HSA in the previous year, you won’t receive a Form 1099-SA.

Q: Why did I receive multiple 1099-SA forms?
A: You’ll receive multiple 1099-SA forms if you had an excess contribution returned to you in the prior year. The first 1099-SA form will show your regular HSA distributions, and the second form will show the returned excess contribution.

You’ll also receive multiple forms if you made distributions from multiple HSAs during the prior year (if you owned multiple HSAs, switched HSA providers mid-year, or inherited another person’s HSA).

Author: James Denison

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