Article: 50188
Form 1099-SA
File Form 1099-SA to report distributions made from a:
- Health savings account (HSA).
- Archer Medical Savings Account (Archer MSA).
- Medicare Advantage Medical Savings Account (MA MSA).
The distribution may have been paid directly to a medical service provider or to the account holder. A separate return must be filed for each plan type.
Form 8889
Distributions from an HSA must be reported on Form 8889 if you receive a Form 1099-SA. Form 8889 is used to report distributions and determine any tax or penalty for using those distributions on non-qualified expenses. Report the gross amount of distributions on Part 2, line 14a. The portion of nonqualifying expenses flows to Form 1040, Schedule 1, Part 1 (HSA literal) and is taxed as income. Any penalty flows to Form 1040, Schedule 2, Part II.
Add HSA Information
We’ll ask you about your HSA contributions during the walk-through; if you missed it, you could access the HSA screen by following these steps:
- Go to Federal Taxes > Review
- Click I’d like to see the forms I’ve filled out or search for a form.
- Type HSA in the search box.
- Click Add form next to Health Savings Account.
- Follow the walk-through.
- It will request information about both contributions and distributions. If the amount you spent on qualified medical expenses is less than the amount withdrawn from your HSA, the difference may be taxable and subject to an additional 20% penalty if there are no exceptions.
- The exception question will show on the HSA screen towards the end of the walk-through as Were any withdrawals that were not used for qualified medical expenses (or rolled over) used for any of the following?
When finished, go to File > Free Return Preview > View Return. Review Form 8889, Part II to verify the calculation. If all distribution funds were used for qualified medical expenses, they should not be taxable.