Form 5498-SA

What is Form 5498-SA?

Form 5498-SA is an IRS form that is filed to report all contributions and rollovers made by employees and employers to their Health Savings Account (HSA), Archer Medical Savings Account (Archer MSA), and Medicare Advantage Savings Account (MA MSA). It is filed by the trustee or financial institution that manages the account.

What is the purpose of filing Form 5498-SA?

Here are three key reasons why Form 5498-SA is filed:

Documents employee and employer contributions to medical savings accounts
Documents the rollover contributions and the account activity
Ensures the contribution stays within the limit defined by the IRS

Who needs to file Form 5498-SA?

Form 5498-SA should be filed by the financial institution managing the medical savings account. Account holders and employees don't have to file the form as part of their income tax return. The institution managing the account prepares and submits the form to the IRS and also provides a copy to the account holder for their records.

What key information is included in Form 5498-SA?

Form 5498-SA usually includes the following essential details related to the contributions made to a medical savings account:

Account holder’s information, including name, address, and taxpayer identification number
Type of the medical savings account (HSA, Archer MSA, or MA MSA)
Total contributions made during the year to each account
Rollover contributions from another account
Contributions made during the previous tax year before the filing deadline
Fair market value of the account at the end of the year

What is the difference between Form 5498-SA and Form 1099-SA?

Basis	Form 5498-SA	Form 1099-SA
Purpose	Reports contributions made to medical savings accounts	Reports distributions or withdrawals from medical savings accounts
What it shows	Money going into the account	Money coming out of the account
Applicable accounts	HSA, Archer MSA, and MA MSA	HSA, Archer MSA, and MA MSA
Includes	Employee contributions, employer contributions, rollovers, and year-end fair market value of the account	Withdrawal or distribution amounts from the account
Filed by	Financial institution or trustee managing the account	Financial institution or trustee managing the account
Used for	Tracking contributions and IRS contribution limits	Reporting withdrawals for tax purposes
Issued to account holder	Usually by May 31	Usually by January 31

What does fair market value mean in Form 5498-SA?

Fair market value (FMV), included in box 5 of Form 5498-SA, represents the total value of the HSA, Archer MSA, and MA MSA account at the end of the year. For instance, consider a person who has:

$2,000 left in their HSA account, and
$500 as an investment value linked to the account

By the end of the year, the account will be worth a total of $2,500. So, the FMV reported in Form 5498-SA will be $2,500.

What happens if no contributions are made to an HSA or Archer MSA during the year?

If the full balance is withdrawn and no further contributions are made, the account manager may not need to file Form 5498-SA.

What are the exceptions associated with Form 5498-SA?

Here are some special circumstances that can occur while filing Form 5498 SA:

Rollovers are usually permitted between eligible HSA and Archer MSA accounts. However, money taken out of the account may become taxable if it is not transferred to another eligible account following IRS rollover rules.
Transfers that happen between two trustees are not usually reported on Form 5498-SA, since it's not considered a rollover or contribution.
The financial institution managing an account that's empty after withdrawal with no contributions need not file Form 5498-SA.
Certain special rules apply if the account holder passes away.