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Form 5498-SA is a federal tax form used to report contributions to a Health Savings Account (HSA), Archer Medical Savings Account (MSA), or Medicare Advantage MSA.
Form 5498-SA sets out all contributions made to the HSA or MSA in the previous tax year. This includes contributions made by an employer, employee, or a third party, such as Medicare. It also reports any rollover amounts from the previous year.
The account custodian or trustee—typically the manager of their HSA or MSA account—is responsible for filing Form 5498-SA with the Internal Revenue Service (IRS) for each account holder. They must also provide a copy to the account holder. In the event of the account holder’s death, a copy of Form 5498-SA is provided to their next of kin.
Employees don’t need to file their copy of Form 5498-SA with their tax declaration; it’s for informational purposes only. They should check it for any errors and keep a copy for their records.
What is a Health Savings Account or Medical Savings Account?
An HSA or MSA is a savings account for employees enrolled in high-deductible private health plans or high-deductible Medicare plans, respectively. Account holders can set aside money pre-tax to pay for qualified medical expenses, such as deductibles and copayments on medical and dental care not covered by their health plan.
Do Employees Need to Report Money Received or Used From an HSA?
As long as the employee used the money from an HSA for qualified medical purposes or rolled it over into another HSA, then they don’t need to report it.
However, employees must report any money they inherited from an HSA—for example, after their spouse dies—or money they used for non-qualified purposes. This is reported as income in Form 1099-SA.
When Does Form 5498-SA Need to Be Filed?
HSA and MSA account custodians and trustees are required to file Form 5498-SA with the IRS and send a copy to participating employees by May 31 for the preceding tax year.
Form 5498-SA reports any contributions made to an employee’s Health Savings Account, Archer Medical Savings Account, or Medicare Advantage MSA during each tax year. It’s prepared and filed by the HSA and MSA account custodian or trustee, and a copy is sent to the employee for informational purposes.
As with anything tax-related, your employees should seek independent advice if they have questions about their Form 5498-SA or their tax situation generally.