IRS Form 8853 – IRS Forms, Instructions, Pubs 2026 – f you’re dealing with specialized health savings accounts or insurance payouts, understanding IRS Form 8853 is essential. This form helps taxpayers report contributions, deductions, and distributions related to Archer Medical Savings Accounts (MSAs), Medicare Advantage MSAs, and long-term care (LTC) insurance contracts. Whether you’re an individual with an Archer MSA or receiving LTC benefits, filing Form 8853 ensures you comply with tax rules and potentially claim deductions. In this comprehensive guide, we’ll cover everything you need to know about IRS Form 8853 for tax year 2025, including who must file, how to complete it, and key updates.
What Is IRS Form 8853?
IRS Form 8853, titled “Archer MSAs and Long-Term Care Insurance Contracts,” is a tax form used to report specific health-related financial activities. It allows you to:
- Report contributions to Archer MSAs, including those made by employers.
- Calculate your Archer MSA deduction.
- Report distributions from Archer MSAs or Medicare Advantage MSAs.
- Report taxable payments from LTC insurance contracts.
- Report taxable accelerated death benefits from life insurance policies.
Archer MSAs are tax-advantaged accounts similar to Health Savings Accounts (HSAs) but were largely phased out after 2007. However, if you had an Archer MSA before then, you can still contribute and use it for qualified medical expenses. Medicare Advantage MSAs are for certain Medicare enrollees, and LTC sections handle insurance payouts for long-term care services.
For tax year 2025, the form remains relevant for legacy accounts and insurance benefits. It’s attached to your Form 1040 or 1040-NR individual tax return.
Who Needs to File IRS Form 8853?
You must file Form 8853 if any of the following apply for tax year 2025:
- You (or your employer) made contributions to an Archer MSA.
- You received distributions from an Archer MSA or Medicare Advantage MSA.
- You acquired an interest in an Archer MSA or Medicare Advantage MSA due to the death of the account holder.
- You received taxable payments from an LTC insurance contract.
- You received taxable accelerated death benefits from a life insurance policy.
If filing jointly, and both you and your spouse have Archer MSAs or Medicare Advantage MSAs, include the SSN shown first on your tax return. Even if you didn’t make contributions but received distributions, filing is required.
No filing is needed if none of these situations apply. However, consult a tax professional if you’re unsure, especially with inherited accounts or per diem LTC benefits.
Key Updates for IRS Form 8853 in Tax Year 2025
As of 2025, there are no major structural changes to Form 8853, but taxpayers should note inflation-adjusted limits and general tax law updates. For instance:
- The daily exclusion limit for per diem LTC benefits is $420 in 2025 (increasing to $430 in 2026).
- Contributions to Archer MSAs are limited based on your high-deductible health plan (HDHP) coverage, with deductions calculated using a worksheet.
- Recent legislation from the Tax Cuts and Jobs Act extensions may impact related deductions, such as medical expense thresholds in Publication 502.
Always check IRS.gov for the latest developments, as no significant revisions were noted mid-year.
Understanding the Sections of Form 8853
Form 8853 is divided into three main sections: A, B, and C. Here’s a breakdown of the structure and required information:
Section A: Archer MSAs
This section reports contributions and distributions for Archer MSAs.
- Line 1: Total employer contributions to your Archer MSA (from Form W-2, Box 12, Code R).
- Line 2: Your contributions to the Archer MSA.
- Line 3: Archer MSA deduction (calculated using a limitation worksheet based on HDHP coverage).
- Line 4-8: Report distributions (from Form 1099-SA), qualified medical expenses, and any excess contributions or additional taxes (potentially requiring Form 5329).
Eligibility for Archer MSAs requires being an eligible individual (self-employed or small employer employee) with an HDHP.
Section B: Medicare Advantage MSAs
Similar to Section A but for Medicare enrollees.
- Line 9-13: Report distributions, qualified expenses, and taxable amounts.
- Note: Medicare Advantage MSAs are rare and tied to specific plans.
Section C: Long-Term Care (LTC) Insurance Contracts
This handles taxable LTC benefits and accelerated death benefits.
- Line 14-26: Enter policyholder details, gross LTC payments (from Form 1099-LTC), qualified expenses, and per diem calculations.
- Use the per diem method if benefits are paid daily, excluding up to $420 per day from income.
- For accelerated death benefits, report if paid on a per diem basis.
The form requires your name, SSN, and attachments like Form 1099-SA or 1099-LTC.
For a visual reference, here’s a sample of IRS Form 8853:
How to Fill Out IRS Form 8853 Step-by-Step?
- Gather Documents: Collect Form W-2 (for contributions), Form 1099-SA (distributions), and Form 1099-LTC (LTC payments).
- Enter Personal Info: Name and SSN at the top.
- Complete Section A or B: Use the worksheet in the instructions to figure deductions. Subtract qualified expenses from distributions to find taxable amounts.
- Fill Section C: Calculate excludable LTC benefits. For per diem, multiply days by $420 and subtract from total payments.
- Calculate Taxes: Add taxable amounts to your Form 1040, Schedule 1.
- File with Your Return: Attach to Form 1040 by April 15, 2026 (or extended deadline).
Use tax software like TurboTax or TaxAct for guided entry, as it handles worksheets automatically.
Common Mistakes to Avoid When Filing Form 8853
- Missing Contributions: Always include employer contributions from W-2.
- Incorrect Deduction Limits: Use the monthly limitation worksheet for HDHP periods.
- Overlooking Exclusions: Don’t tax LTC benefits below the per diem limit.
- Filing Unnecessarily: Only file if required; otherwise, skip it.
- Late Filing: Deadline is April 15, 2026, with penalties for non-filing if owed.
FAQs About IRS Form 8853
1. What if I have multiple HDHPs?
Figure the deduction limitation separately for each, then combine.
2. Are LTC payments always taxable?
No, qualified expenses or per diem up to $420/day are excludable.
3. What happens if I inherit an Archer MSA?
Report as a beneficiary on Form 8853 and potentially file Form 5329 for taxes.
4. Can I e-file Form 8853?
Yes, it’s supported in most tax software and IRS e-file systems.
5. Where can I get the latest Form 8853?
Download from IRS.gov or use tax prep tools for auto-updates.
For personalized advice, consult a tax advisor. This guide is based on 2025 IRS rules and can help optimize your filing for Archer MSAs and LTC insurance. Stay compliant and maximize deductions!