Instructions for Forms 1099-SA and 5498-SA (2022) | Internal Revenue Service

Specific Instructions for Form 1099-SA

file Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, to report distributions made from a health save account ( HSA ), Archer checkup savings account ( Archer MSA ), or Medicare Advantage MSA ( MA MSA ). The distribution may have been paid directly to a aesculapian service provider or to the report holder. A divide return must be filed for each design type .

Transfers

Do not report a trustee-to-trustee transmit from one Archer MSA or MA MSA to another Archer MSA or MA MSA, from an Archer MSA to an HSA, or from one HSA to another HSA. For reporting purposes, contributions and rollovers do not include transfers.

HSA Mistaken Distributions

If amounts were distributed during the class from an HSA because of a err of fact due to reasonable induce, the report beneficiary may repay the mistake distribution no later than April 18 following the first year the report benefactive role knew or should have known the distribution was a error. For example, the report beneficiary sanely, but mistakenly, believed that an expense was a dependent checkup expense and was reimbursed for that expense from the HSA. The account benefactive role then repays the misguided distribution to the HSA .
Under these circumstances, the err distribution is not included in megascopic income, is not capable to the extra 20 % tax, and the refund is not subject to the excise tax on excess contributions. Do not treat the repayment as a contribution on Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information .

. This is an Image: taxtip.gif As the trustee or custodian, you do not have to allow beneficiaries to return a mistake distribution to the HSA. however, if you do allow the return of the false distribution, you may rely on the score beneficiary ‘s affirmation that the distribution was in fact a mistake. See Notice 2004-50, 2004-33 I.R.B. 196, Q/A-76, available at IRS.gov/irb/2004-33_IRB # NOT-2004-50. Do not report the misguided distribution on Form 1099-SA. Correct any file Form 1099-SA with the IRS and the history beneficiary equally soon as you become mindful of the error. See compensate Returns on Paper Forms in the current General Instructions for Certain Information Returns for more information..

HSA Closure Under the USA PATRIOT Act

If an HSA is closed at any time by the HSA trustee or custodian due to a failure of the participant to satisfy the Customer Identification Program requirements described in section 326 of the USA PATRIOT Act, the distribution from the HSA must be reported .
If a regular contribution is made to the HSA that is closed, and a distribution is made to the participant, enter the arrant distribution in box 1. If no earnings are distributed, enter zero in box 2. If earnings are distributed, enter the measure of earnings in box 2. Enter code 2 in box 3. See the instructions for boxes 1 through 3, by and by .
In addition, Form 5498-SA must be filed to report any rollover ( qualify HSA financing distributions ( trustee-to-trustee transfers from an IRA to an HSA under incision 408 ( five hundred ) ( 9 ) ) ) contributions to the HSA subsequently closed by the regent or custodian. See the Specific Instructions for Form 5498-SA, later .

Death of Account Holder

Archer MSAs and MA MSAs.
When the account holder dies and the intend beneficiary is the surviving spouse, the follow apply .

  • The spouse becomes the explanation holder of the Archer MSA .
  • An MA MSA is treated as an Archer MSA of the spouse for distribution purposes .
  • Distributions from these accounts are subject to the rules that apply to Archer MSAs .

If the destine benefactive role is not the spouse or there is no list beneficiary, the explanation ceases to be an MSA as of the date of death and the fair market value ( FMV ) on that go steady is reported .
If there is more than one recipient, the FMV should be allocated among them, as allow .
If the beneficiary is the estate, enter the estate of the realm ‘s name and TIN in set of the recipient ‘s on the kind .

Distribution in year of death.

If you learn of the account holder ‘s death and make a distribution to the beneficiary in the year of end, issue a Form 1099-SA and record in :

  • Box 1, the gross distribution ;
  • Box 3, code 4 ( see Box 3. distribution Code, later ) ; and
  • Box 4, the FMV of the history on the date of death .

Distribution after year of death.

If you learn of the end of the report holder and make a distribution after the class of death, issue a Form 1099-SA in the class you learned of the end of the account holder. enter in :

  • Box 1, the gross distribution ;
  • Box 3, one of the postdate codes ( see Box 3. distribution Code, belated ) :

    1—If the beneficiary is the spouse ,
    4—If the beneficiary is the estate, or

    6—If the beneficiary is not the spouse or estate of the realm ;
  • Box 4, the FMV of the account on the date of death, reduced by any payments from the HSA made for the dead person ‘s qualify aesculapian expenses, if paid within 1 class after death .

HSAs.
When the history holder dies, the watch applies .

  • If the designate beneficiary is the surviving spouse, the spouse becomes the account holder of the HSA .
  • If the designate beneficiary is not the survive spouse, the account ceases to be an HSA on the date of the report holder ‘s death. The FMV of the history as of the date of death is required to be reported in box 4. Follow the rules and coding above under distribution in year of end and distribution after class of end .

Statements to Recipients

If you are required to file Form 1099-SA, you must provide a affirmation to the recipient. For more data about the requirement to furnish a Form 1099-SA or acceptable utility statement to recipients, see part M in the stream General Instructions for Certain Information Returns .

Truncating Recipient’s TIN on Payee Statements

pursuant to Regulations section 301.6109-4, all filers of this form may truncate a recipient role ’ s TIN ( social security number ( SSN ), individual taxpayer designation number ( ITIN ), adoption taxpayer recognition number ( ATIN ), or employer identification issue ( EIN ) ) on payee statements. truncation is not allowed on any documents the filer files with the IRS. A trustee’s/payer ‘s TIN may not be truncated on any shape. See character J in the current General Instructions for Certain Information Returns .

Account Number

The account total is required if you have multiple accounts for a recipient role for whom you are filing more than one Form 1099-SA. additionally, the IRS encourages you to designate an account phone number for all Forms 1099-SA that you file. See part L in the current General Instructions for Certain Information Returns .

Box 1. Gross Distribution

Enter the total amount of the distribution. Include any earnings individually reported in box 2. You are not required to determine the taxable total of a distribution. Do not report a negative amount in corner 1. Do not report the withdrawal of excess employer contributions ( and the earnings on them ) returned to an employer as a distribution from an employee ‘s HSA. Do not report excess MA MSA contributions returned to the Secretary of Health and Human Services or his or her spokesperson .

Box 2. Earnings on Excess Contributions

Enter the sum earnings distributed with any excess HSA or Archer MSA contributions returned by the due go steady of the report holder ‘s tax return. Include this amount in box 1. Report earnings on other distributions alone in box 1 .

. This is an Image: taxtip.gif For HSAs and Archer MSAs, if you are reporting earnings on a distribution of surfeit contributions, use the method acting under Regulations section 1.408-11 for calculating the final income attributable to IRA contributions that are distributed as a retort contribution. If the sum in box 2 includes earnings on excess contributions, accede distribution code 2 in box 3..

Box 3. Distribution Code

Enter the appropriate distribution code from the play along number that shows the type of distribution .

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

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. Also, see Distribution after year of death
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 early 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. See Death of Account Holder
5—Prohibited transaction See sections 220(e)(2) and 223(e)(2).
6—Death distribution after year of death to a nonspouse benefactive role Use this code for payments to a decedent’s nonspouse beneficiary, other than an estate, after the year of death. Do not use with code 4.

Box 4. FMV on Date of Death

Enter the FMV of the account on the date of death. See Death of Account Holder, earlier .

Box 5. Checkbox

Check the box to indicate if this distribution was from an HSA, Archer MSA, or MA MSA .

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