IRS Form 1099-SA – In the world of tax reporting, IRS Form 1099-SA plays a crucial role for individuals who have withdrawn funds from health-related savings accounts. Whether you’re dealing with a Health Savings Account (HSA), an Archer Medical Savings Account (Archer MSA), or a Medicare Advantage MSA (MA MSA), this form documents distributions made during the tax year. These distributions could be payments directly to medical providers or to the account holder themselves. If you’re wondering what Form 1099-SA means for your taxes, how to interpret it, or who needs to file it, this SEO-optimized guide breaks it all down using the latest information from trusted sources like the IRS.
Form 1099-SA ensures that the IRS tracks these distributions, helping determine if any amounts are taxable. Not all distributions are taxable—qualified medical expenses are typically tax-free—but understanding the form is essential to avoid surprises during tax season. We’ll cover everything from the purpose of the form to filing deadlines, penalties, and recent updates for 2025 and 2026 tax years.
What Is IRS Form 1099-SA?
IRS Form 1099-SA, officially titled “Distributions From an HSA, Archer MSA, or Medicare Advantage MSA,” is an information return used to report any money withdrawn from these specialized accounts during the calendar year. It’s part of the broader 1099 series, which reports various types of non-wage income to the IRS.
- Health Savings Account (HSA): A tax-advantaged account for individuals with high-deductible health plans to save for medical expenses.
- Archer Medical Savings Account (Archer MSA): An older type of MSA available to self-employed individuals or small business employees, similar to HSAs but with stricter eligibility.
- Medicare Advantage MSA (MA MSA): A combination of a high-deductible Medicare plan and a savings account for qualified medical costs.
The form must be filed separately for each type of plan. Recipients use the information on Form 1099-SA to complete their personal tax returns, such as reporting on Form 8889 for HSAs or Form 1040. Even if the distribution isn’t taxable (e.g., used for qualified medical expenses), it still needs to be reported.
For a visual example of what the form looks like, here’s a sample filled-out IRS Form 1099-SA:
Who Must File Form 1099-SA?
The responsibility for filing Form 1099-SA falls on the trustees or custodians of the accounts, such as banks, credit unions, or insurance companies that manage HSAs, Archer MSAs, or MA MSAs. If you’re an account holder who received a distribution, you don’t file the 1099-SA yourself—the institution does. However, you’ll receive Copy B of the form by January 31 of the following year to use for your tax filing.
Not every transaction requires reporting. For instance:
- Trustee-to-trustee rollovers between similar accounts (e.g., Archer MSA to HSA) are not reported.
- Mistaken distributions from HSAs that are repaid by the tax return due date (without extensions) due to reasonable cause aren’t included if properly handled.
- Excess contributions returned to employers or the Secretary of Health and Human Services aren’t reported.
If you’re the recipient, check your mail or online portal for this form if you took any distributions in the prior year.
Breaking Down the Boxes on Form 1099-SA
Form 1099-SA has several key boxes that provide detailed information about the distribution. Here’s a breakdown based on the official form layout:
| Box Number | Description | Details |
|---|---|---|
| 1 | Gross Distribution | Total amount distributed, including earnings from Box 2. This includes payments to medical providers or the account holder. Negative amounts or certain excess returns aren’t included. |
| 2 | Earnings on Excess Contributions | Earnings from excess HSA or Archer MSA contributions withdrawn by the tax return due date. Included in Box 1 and taxable; may incur a 6% excise tax if excess remains (report on Form 5329). |
| 3 | Distribution Code | A code indicating the type of distribution (see next section for codes). |
| 4 | FMV on Date of Death | Fair market value of the account on the account holder’s date of death, adjusted for any qualified medical expenses paid within one year after death. |
| 5 | Account Type Checkbox | Indicates if it’s an HSA, Archer MSA, or MA MSA. |
The form also includes payer and recipient details, such as names, addresses, TINs, and an optional account number (required if multiple accounts exist). It may mark if it’s a corrected or void form.
Distribution Codes Explained
Box 3 on Form 1099-SA uses codes to categorize the distribution, which affects tax treatment:
- Code 1: Normal distributions (default if no other code applies). Could be taxable if not for qualified expenses; may incur a 20% additional tax for non-qualified HSA/MSA withdrawals.
- Code 2: Excess contributions returned.
- Code 3: Distributions due to disability under section 72(m)(7).
- Code 4: Death distribution (other than code 6), such as to an estate.
- Code 5: Prohibited transaction under sections 220(e)(2) or 223(e)(2).
- Code 6: Death distribution after the year of death to a nonspouse beneficiary (not an estate).
For death-related distributions, special rules apply. If the beneficiary is a spouse, the account may transfer to them; otherwise, the FMV is reported, and distributions are coded accordingly.
How to Report Form 1099-SA on Your Tax Return?
As a recipient, use Form 1099-SA to report distributions on your federal tax return. For HSAs, this typically goes on Form 8889, where you’ll calculate the taxable portion. Qualified medical expenses (like doctor visits, prescriptions, or dental care) are tax-free, but non-qualified uses are included in gross income and may face penalties.
If you repaid a mistaken distribution by the due date, it might not be taxable—consult a tax professional. Always keep records of medical expenses to substantiate claims.
Filing Deadlines and Penalties for Form 1099-SA
Filers must furnish Copy B to recipients by January 31 and file Copy A with the IRS by February 28 (paper) or March 31 (electronic). Penalties for late filing or failure to furnish statements can range from $60 to $630 per return, depending on timing and intent—details in Publication 1099. For recipients, failing to report taxable distributions can lead to underpayment penalties or audits.
Electronic Filing Options and Requirements
If filing 10 or more information returns (aggregated across types), electronic filing is mandatory per Treasury Decision 9972, effective for returns due after January 1, 2024. Use the IRS’s Information Returns Intake System (IRIS) or other approved methods via IRS.gov/InfoReturn. Truncating the recipient’s TIN is allowed on statements but not on IRS filings.
Recent Changes and Updates for 2025-2026
The latest instructions, revised December 2026, apply to 2026 distributions filed in 2027. Use the April 2025 revision of Form 1099-SA. Changes include separated address fields on related Form 5498-SA and ongoing e-filing thresholds. For HSAs closed under the USA PATRIOT Act, specific reporting uses code 2. Always check IRS.gov/Form1099SA for the most current developments.
Conclusion
Navigating IRS Form 1099-SA doesn’t have to be complicated. By understanding its purpose, boxes, and reporting requirements, you can ensure compliance and potentially minimize your tax liability. If you’re a filer or recipient dealing with HSA distributions, Archer MSA withdrawals, or MA MSA payments, consult the official IRS resources. For the latest PDF version of Form 1099-SA, download it here: https://www.irs.gov/pub/irs-pdf/f1099sa.pdf.
Remember, this guide is for informational purposes—seek advice from a tax professional for personalized guidance. Stay informed to make the most of your health savings accounts!