Learning Center / HSA Tax Time 101

IMPORTANT NOTICE: Tax deadline extension
The IRS changed the tax filing deadline from April 15 to May 17, 2021. Select states impacted by the February winter storms have a deadline of June 15.

Get more details and up-to-date information here.

HSA Tax Time 101

 

HSA Tax Time 101 is a resource that provides answers to some of the most frequently asked Health Savings Account (HSA) tax questions. We organized the FAQs into three categories: Tax Documents; Contributions and Distributions; and Tax Time Reminders. Please visit irs.gov for additional information and resources, including IRS Publication 969, which explains the tax advantages and requirements of an HSA.

Please note: HSA Bank does not provide legal or tax advice. Please contact your tax professional with any tax-related questions.

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Tax Documents

You may get both a 1099-SA and 5498-SA from us.

1099-SA
IMPORTANT: You WON'T receive this form if you DIDN'T withdraw funds from your HSA in the prior year.

The 1099-SA is used to report any distribution (withdrawal) of funds from your HSA during the prior year. You must report distributions from your HSA on IRS Form 8889.

There’s a sample 1099-SA form from the IRS here. Instructions are on page 3. The HSA Bank 1099-SA form may look slightly different, but it will contain the same information.

5498-SA
The 5498-SA form reports all contributions to your HSA for the prior year, including those contributed between Jan. 1 and the tax filing deadline of the current year. It also reports your HSA balance as of Dec. 31 of the prior year. You’ll get an email once this form is available. If you chose to get paper documents, you’ll get this form in the mail. You won’t get a 5498-SA form if you didn’t have contributions and your balance was zero dollars at the end of the year. You must report contributions from your HSA on IRS Form 8889. Get 5498-SA information here.

There’s a sample 5498-SA form from the IRS here. Instructions are on page 3. The HSA Bank 5498-SA form may look slightly different, but it will contain the same information.

This form is informational only and doesn’t need to be filed with your income tax return.

Please talk to a tax advisor if you need help.

The 1099-SA form will be available mid-to-late January on the Member Website if you had distributions in the prior year. If you chose to get paper documents, you’ll get your 1099-SA in the mail in late January/early February.

IMPORTANT: You WON'T get the 1099-SA form if you DIDN'T withdraw funds from your HSA in the previous year.

The 5498-SA form is typically delivered the month after the tax filing deadline, allowing any contributions made in the current year for the prior year to be included. (If you make additional HSA contributions for the prior year after the 5498-SA is issued, you’ll get an updated 5498-SA.)

Some accountholders will get their 5498-SA in January with their 1099-SA. If you get your 5498-SA at this time and then make prior-year contributions, you’ll get an updated 5498-SA. You won’t get a 5498-SA form if you didn’t have contributions and your balance was zero dollars at the end of the year.

Please note this form is informational only and doesn’t need to be filed with your income tax return.

You can access your contributions by tax year when you log in to the Member Website, click on "Account Summary" under the "Accounts" menu, and choose "HSA Contributions By Tax Year." View these Tax Form Tips for more details.

Note: You're responsible for verifying the accuracy of the applicable IRS maximum each year based upon your situation.

If you’re an online banking user, your tax documents will be available to you on the Member Website. If you chose to get paper tax documents, you’ll get a copy in the mail.

You can get your 1099-SA and 5498-SA forms when you click the "Message Center" tab and then the “View Statements” link. You won’t get a 5498-SA form if you didn’t have contributions and your balance was zero dollars at the end of the year. Get 5498-SA information here.

Contributions and Distributions

No. Payroll deferral or employer pre-tax HSA contributions (up to the applicable limit) reported on Form W-2 as non-taxable are excluded from your gross income. You can claim a tax deduction for HSA contributions (up to the applicable limit) made outside of payroll deferral, even if you don’t itemize your deductions on Form 1040.

IRS contribution limits for individual and family plans typically increase every year. Plus, individual accountholders age 55 and older can make an additional $1,000 catch-up contribution. Eligible spouses over 55 can only make catch-up contributions to his/her account. For more information, please visit our IRS Guidelines and Eligible Expenses page.

Yes. Yearly contributions should be made by the federal tax filing deadline for your state. Talk to a tax advisor or visit IRS.gov for details.

No. Filing an individual extension has no bearing on the IRS annual contribution deadline.

Your employer’s HSA contributions are reported on your W2 and included as part of the total account contributions listed on form 5498-SA.

You may withdraw money at any time for IRS-qualified medical expenses incurred after your HSA was established.

HSA contributions that exceed the IRS annual limit must be removed by the tax filing deadline or you can incur tax penalties and/or IRS fees. Excess contribution removals are reported in the year in which the removal was made, not in which the excess was made. For example, if you made excess contributions in the prior year but remove the excess this year, you’ll get a current-year 1099-SA showing the removal. Even when the excess is removed, please note that the 5498-SA will always show the contribution.

Tax Time Reminders

No. HSA Bank doesn’t provide tax or legal advice. Please talk to a qualified tax or legal professional if you need advice on your specific situation.

If you lose your health insurance, you’re required to prorate the contribution limits for the months in which you had insurance within the calendar year.

HSA eligibility ends upon enrolling in Medicare. You can still contribute the prorated IRS contribution limit until the IRS contribution deadline. Once you enroll in Medicare, you can keep the account open and continue to use funds already in the account.

While you’re not required to submit any receipts to HSA Bank for your HSA, you absolutely should save any receipts and Explanation of Benefits (EOBs) for IRS-qualified medical expenses for tax purposes. Using our online expense tracker, you can easily enter and track these expenses when you securely upload receipts and supporting documentation.

According to the last-month rule, if you’re eligible on the first day of the last month of your tax year (Dec. 1 for most taxpayers), you’re considered eligible for the entire year. Therefore, you’re treated as having the same HDHP coverage for the entire year as you had on the first day of that last month.

If contributions were made to your HSA based on you being eligible for the entire year under the last-month rule, you must remain eligible during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. (For example: Dec. 1 of the prior year through Dec. 31 of this year.)