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What is Form 1099-SA?

Form 1099-SA, to report the distributions made from an:

Health savings account (HSA).
Archer Medical Savings Account (Archer MSA).
Medicare Advantage Medical Savings Account (MA MSA).

The distribution may have been paid directly to a medical service provider or to the account holder and available at the end of January. A separate return must be filed for each plan type. HSA are reported on Box 12 with code W in the W-2 Form, which includes the medical expenses. The filer may file more than one Form 1099-SA when they have multiple accounts. The form includes the total amount of the distribution, the total earnings distributed with any excess HSA or Archer MSA contributions, appropriate distribution code for the types of distribution, FMV of the account on the date of death, and a checkbox to choose the type of distribution or the type of account to be chosen by the filer. The distributions will be taxed at a rate of 20%.

Distribution Codes for Distributions from HSAs, Archer MSAs, and Medicare Advantage MSAs:

Code	Explanation
1—Normal distributions	Use this code for normal distributions to the account holder and any direct payments to a medical service provider. Use this code if no other code applies.
2—Excess contributions	Use this code for distributions of excess HSA or Archer MSA contributions to the account holder.
3—Disability	Use this code if you made distributions after the account holder was disabled (see section 72(m)(7)).
4—Death distribution other than code 6	Use this code for payments to a decedent’s estate in the year of death. Also, use this code for payments to an estate after the year of death. Do not use with code 6.
5—Prohibited transaction	See sections 220(e)(2) and 223(e)(2).
6—Death distribution after a year of death to a non-spouse beneficiary	Use this code for payments to a decedent’s non-spouse beneficiary, other than an estate, after the year of death. Do not use with code 4.

How to File IRS Form 1099-SA?

The 1099-SA form is to report distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage medical savings account (MA MSA). The filer must keep all receipts and records of medical expenses paid with their funds to document that distributions have been made exclusively for qualified medical expenses and submit them to IRS by filing Form 1099-SA.

Qualified Medical Expenses includes

Most medical care and services
Dental and vision care
Prescription drugs and some over-the-counter drugs that are not covered by insurance

Who Uses Form 1099-SA?

Form 1099-SA is useful in many ways, it’s always good to have supporting documents at tax time. Some filers use their HSA primarily to pay for their current healthcare expenses. Others use it as a long-term savings tool, investing the funds for the tax-free earnings. There is no deadline for using the money. For your information, withdrawals for eligible medical expenses are tax-free at any age. The filer can use the fund for their medical expenses. In the tax year, an HSA, Archer MSA or MA MSA owner dies, generally, the spouse / any person related to the owner must file a Form 5498-SA and furnish a statement for the decedent.

When is the Form 1099-SA deadline?

Filing Type	Deadline
Recipient Copy	January 31
IRS Paper Filing	February 28
IRS Electronic Filing	March 31

Note: If the due date/deadline falls on a Saturday, Sunday, or federal holiday, the filer will need to E-file on the next business day.

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