Table of Contents

Do I Have to Report Form 5498-SA on My Tax Return?

The short answer is no, you generally do not have to report Form 5498-SA on your tax return. Think of Form 5498-SA as an informational document. It’s primarily for your records, not necessarily something you actively enter on your tax return, provided your contributions were made correctly and you didn’t take any improper distributions. Let’s delve deeper into why, and explore some nuances where you might need to pay a bit more attention.

Understanding Form 5498-SA: Your HSA/MSA Report

Form 5498-SA, officially titled “HSA, Archer MSA, or Medicare Advantage MSA Information,” is a critical document if you contribute to or have an active Health Savings Account (HSA), Archer Medical Savings Account (Archer MSA), or a Medicare Advantage MSA. It’s issued by your HSA/MSA trustee or custodian, like a bank or financial institution. It summarizes important information about your account for the tax year, including:

Total contributions made to your HSA/MSA: This includes both contributions you made yourself and those made by your employer (if any).
Fair market value of your account: This is the value of your HSA/MSA as of December 31st of the tax year.
Any rollovers to your HSA/MSA: This will show any amounts you transferred from another HSA/MSA.

Think of it as the “annual statement” for your HSA/MSA, similar to what you’d receive for an IRA or 401(k). While you don’t usually report this directly on your tax return, it’s crucial for reconciling your own records and ensuring you’re following all the HSA/MSA rules.

Why You (Usually) Don’t Report Form 5498-SA Directly

The primary reason you typically don’t report Form 5498-SA directly on your tax return is that the information it contains is usually already reported elsewhere or doesn’t require separate reporting. Let’s break this down:

Contributions: You report your HSA contributions on Form 8889, Health Savings Accounts (HSAs), which you file along with your Form 1040. Your employer contributions are usually already reflected in Box 12 of your W-2 form (coded with ‘W’). Using Form 5498-SA, you can confirm that you don’t exceed the contribution limits and that the amount on the 5498-SA matches your records, but you only report the contributions on Form 8889.
Distributions: You also report HSA distributions on Form 8889. You use the information on Form 5498-SA to help verify you have not exceeded the annual contribution limits. If you’ve used the money for qualified medical expenses, those distributions are generally tax-free, but still need to be recorded on Form 8889.
Fair Market Value: The IRS doesn’t require you to report the year-end fair market value of your HSA/MSA unless there’s a specific reason, such as needing to determine excess contributions (explained below). The fair market value is primarily for your own record-keeping.

Essentially, the IRS wants to know about your contributions and distributions, and those are reported separately on Form 8889. The 5498-SA acts as backup documentation and helps you ensure you’re accurately filling out Form 8889.

When You Might Need to Pay Extra Attention

While you generally don’t report Form 5498-SA directly, there are situations where you’ll need to pay closer attention and might need to take action based on the information it contains:

Excess Contributions: If the total contributions shown on your Form 5498-SA exceed the allowable HSA contribution limits for your age and coverage type (single or family), you have made excess contributions. These contributions are not tax-deductible, and you could face a penalty. You’ll need to withdraw the excess contributions (plus any earnings attributable to those contributions) by the tax filing deadline (including extensions) to avoid penalties. Consult IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, for details.
Incorrect Information: If you notice any discrepancies between the information on Form 5498-SA and your own records, contact your HSA/MSA trustee or custodian immediately. For example, if the amount of contributions shown on the form is incorrect, or if your name or Social Security number is wrong, it needs to be corrected to avoid potential issues with the IRS.
Rollovers: If you completed a rollover during the year, ensure the amount is correctly reflected on Form 5498-SA and that you followed the rollover rules (typically, you have 60 days to complete the rollover). Failure to do so could result in the rollover being treated as a distribution.

Understanding Form 8889: Where the Magic Happens

Because you will not typically directly report Form 5498-SA on your tax return, it is imperative to have a complete understanding of Form 8889. This is where you report the following:

HSA Contributions you made.
HSA Distributions you received.
Any excess contributions or penalties.
Any transfers from your IRA to your HSA.

Frequently Asked Questions (FAQs)

Here are some common questions about Form 5498-SA:

1. What is the deadline for receiving Form 5498-SA?

The deadline for HSA/MSA trustees or custodians to provide you with Form 5498-SA is typically May 31st of the following year. This gives you time to review the information and use it to prepare your tax return.

2. What should I do if I don’t receive Form 5498-SA?

If you haven’t received Form 5498-SA by the deadline, contact your HSA/MSA trustee or custodian to request a copy. It’s their responsibility to provide it to you.

3. Can my employer contribute to my HSA?

Yes, your employer can contribute to your HSA. These contributions are not included in your taxable income, but they do count toward the overall annual contribution limit. Employer contributions will be reflected in Box 12 of your W-2 form, coded with ‘W’.

4. What are qualified medical expenses for HSA purposes?

Qualified medical expenses are those that would generally qualify for the medical expense deduction on Schedule A (Form 1040). This includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body. See IRS Publication 502, Medical and Dental Expenses, for a comprehensive list.

5. What happens if I use HSA funds for non-qualified expenses?

If you use HSA funds for expenses that are not considered qualified medical expenses, the distribution will be included in your taxable income and subject to a 20% penalty (unless you are over age 65, disabled, or the distribution is made to your estate after your death).

6. What are the HSA contribution limits for 2023 and 2024?

The HSA contribution limits for 2023 were $3,850 for individuals and $7,750 for families. For 2024, the limits are $4,150 for individuals and $8,300 for families. Individuals age 55 and older can also make an additional “catch-up” contribution of $1,000 per year.

7. Can I use my HSA to pay for my spouse’s or dependent’s medical expenses?

Yes, you can use your HSA to pay for qualified medical expenses of your spouse and dependents, even if they are not covered under your high-deductible health plan (HDHP).

8. Can I transfer funds from my IRA to my HSA?

Yes, you can make a one-time tax-free transfer from an IRA to your HSA. This transfer counts toward your annual HSA contribution limit. It is reported on Form 8889.

9. Do I need to keep receipts for my HSA distributions?

While you don’t need to submit receipts with your tax return, it’s highly recommended that you keep detailed records of your HSA distributions and the corresponding medical expenses. This will help you substantiate your claim that the distributions were used for qualified medical expenses if the IRS ever audits your return.

10. What happens to my HSA if I lose my HDHP coverage?

You can still use the funds in your HSA even if you no longer have HDHP coverage. However, you can’t make any further contributions to the HSA unless you regain HDHP coverage.

11. Are HSA contributions deductible?

Yes, HSA contributions are generally deductible “above the line,” meaning you don’t have to itemize to claim the deduction. You take the deduction on Form 8889.

12. Can I use my HSA to pay for over-the-counter (OTC) medications?

Yes, as of January 1, 2020, over-the-counter medications are considered qualified medical expenses for HSA purposes, even without a prescription.