1099-SA Tax Form: Download & Instructions

What Is the 1099-SA Tax Form?

The 1099-SA Tax Form is an official document issued by the Internal Revenue Service (IRS) in the United States. It serves to report distributions from health-related savings accounts such as Health Savings Accounts (HSAs), Archer Medical Savings Accounts (MSAs), and Medicare Advantage MSAs. This form is essential for ensuring tax compliance and transparency in managing these specialized savings vehicles. Each taxpayer who receives distributions from these accounts will be provided with a Form 1099-SA by the trustee or custodian of the account.

The form is typically issued when there is a qualified or non-qualified withdrawal from a medical savings account during a calendar year. The information it contains affects how you report your income and expenses on your Form 1040. Whether you’re a taxpayer or a tax professional, understanding this form is crucial to avoid errors or penalties. Since tax laws evolve, accurate knowledge of such forms helps individuals stay compliant with federal tax regulations.

The 1099-SA includes important fields like the gross distribution, earnings on excess contributions, distribution codes, and whether any Medicare Advantage MSAs are involved. Failing to report these distributions correctly can lead to audits or unexpected tax liabilities. In general, this form acts as a financial record for both the taxpayer and the IRS, ensuring that any withdrawals from these accounts are justified under the law. It’s essential to treat the 1099-SA with the same level of importance as any income-related document during tax filing season.

Who Should File and When It Should Be Filed

The Form 1099-SA should be filed by the institution that manages your HSA, MSA, or MA MSA. If you are the account holder, you do not file this form yourself, but you are responsible for using the data reported on it when completing your personal tax return. You should receive this form by January 31st of the year following the distribution. For example, if you took a distribution in 2024, you should expect to receive the corresponding 1099-SA by January 31, 2025.

Taxpayers must then use the information from the 1099-SA to fill out Form 8889 for HSAs or Form 8853 for MSAs and include them with their annual tax return (Form 1040 or 1040-SR). The IRS requires this because while qualified medical expenses are tax-free, non-qualified distributions are subject to both income tax and potentially a 20% additional penalty. Therefore, timing and accurate reporting are key to avoiding complications.

If you receive a 1099-SA, you are legally obligated to report the distribution on your tax return, whether or not you used the funds for qualified medical expenses. In cases of non-qualified use, you must also report additional income and penalty amounts. Form 1099-SA helps prevent underreporting and ensures that the preferential tax treatment of these accounts is not abused. You must keep all related receipts and documents for at least three years in case of an audit or discrepancy.

Understanding the Components of the 1099-SA Form

The 1099-SA form is relatively straightforward but contains several fields that can significantly impact your tax obligations. Understanding each component is essential for accurate filing and compliance. Each field offers insight into how your HSA or MSA distributions were used throughout the year. Below is a comprehensive table that breaks down each box and what it means.

*Table 1: Breakdown of **Form 1099-SA** Fields*
Box Number	Description	Explanation
Box 1	Gross Distribution	Total amount distributed during the tax year.
Box 2	Earnings on Excess Contributions	Any earnings made from excess contributions that were withdrawn.
Box 3	Distribution Code	Indicates the type of distribution (qualified, death, disability, etc.).
Box 4	FMV on Date of Death	Fair market value of the account if the account holder is deceased.
Box 5	Account Type	Specifies if it is an HSA, MSA, or MA MSA.

Each field should be double-checked for accuracy before transferring the values to Form 8889 or Form 8853. Errors in these fields can trigger notices from the IRS and could potentially delay the processing of your return. Additionally, if you used the funds for qualified medical expenses, it's essential to retain those receipts for validation. These details can be critical in the event of an audit.

How to Correctly Fill Out Your Tax Forms Using 1099-SA

Though you don’t fill out the 1099-SA yourself, you do need to transfer the information accurately to your personal tax forms. Below is a detailed step-by-step guide to correctly incorporating this form into your tax return. This is vital for ensuring compliance and potentially reducing your taxable income.

Collect your 1099-SA and verify that the personal information and SSN are correct.
Check Box 5 to determine whether the account is an HSA, MSA, or MA MSA.
For HSAs, fill out Form 8889 using the data in Boxes 1 through 3.
Report qualified distributions on Line 15 of Form 8889 and any earnings on excess contributions on Line 21.
Use IRS Form 1040 to include totals from Form 8889 and calculate any additional tax owed.
Retain supporting documents like receipts and invoices for all qualified medical expenses claimed.
Review your return for accuracy and submit by the IRS deadline, usually April 15th.

It’s recommended to use tax software or hire a tax professional, especially if you have multiple distributions or unique circumstances like inheritance or disability. Tax professionals often use these forms to help clients identify deductions, avoid penalties, and ensure that income is correctly reported. If you made a mistake, you can file an amended return using Form 1040-X, but that’s usually a last resort.

Common Mistakes and How to Avoid Them

Despite the form’s simplicity, several common mistakes can lead to tax trouble. These include not reporting the distribution at all, misunderstanding what qualifies as a medical expense, and entering data in the wrong fields on your tax return. A small oversight could result in additional taxes or penalties, particularly the 20% penalty on non-qualified distributions.

Another frequent error is neglecting to report excess contributions and associated earnings. These must be withdrawn and reported separately. If they are not removed by the tax deadline, you may be subject to a 6% excise tax each year the excess remains in the account. People who inherit HSAs also often misinterpret how the account should be treated for tax purposes, further complicating matters.

Being proactive can help avoid these issues. Use reliable tax preparation software that includes prompts for Form 1099-SA and related forms. Additionally, keeping meticulous records of medical receipts and account statements will support your claims and make tax filing more seamless. In case of uncertainty, consult IRS Publication 969 or speak with a licensed tax advisor.

One of the main reasons for tracking 1099-SA distributions is to preserve the significant tax advantages these accounts offer. Health Savings Accounts, in particular, provide a triple tax advantage: contributions are tax-deductible, earnings grow tax-free, and qualified withdrawals are also tax-free. Understanding this makes the accurate use of 1099-SA all the more critical.

Employers may also contribute to your HSA, and these contributions are excluded from your taxable income. In 2025, the maximum contribution limits are $4,150 for individuals and $8,300 for families, with an additional $1,000 catch-up contribution for those aged 55 or older. When used correctly, this allows you to significantly reduce your overall taxable income while setting aside funds for medical needs.

In addition, HSA funds never expire and can be invested for long-term growth, making them a viable retirement planning tool. Some people even delay using HSA funds until retirement, letting them grow over decades. This feature transforms the HSA into more than just a healthcare fund—it becomes a key element of personal financial strategy, particularly as healthcare costs continue to rise.

Key Takeaways and Final Thoughts

Navigating tax season can be stressful, but having a strong understanding of the Form 1099-SA will help you stay compliant and possibly even save money. This form serves as the government’s way of ensuring that the tax benefits of HSAs and MSAs are being used as intended. Every U.S. taxpayer who withdraws from these accounts must account for their use, especially to avoid penalties.

Issued by: HSA/MSA custodian, not the taxpayer.
Deadline: January 31st each year for prior year distributions.
Required forms: Form 8889 or Form 8853, depending on the account type.
Penalty risk: 20% for non-qualified expenses, 6% excise tax on excess contributions.
Contribution limit (2025): $4,150 individual / $8,300 family + $1,000 catch-up (55+).

If you’re using tax software, ensure it supports health savings accounts and is updated for the latest IRS guidelines. If doing it manually, take your time with Forms 8889 and 8853, and consult official IRS documents. Most importantly, store all your medical receipts in a safe place for at least three years in case the IRS questions your deductions. These practices will save you stress and money in the long run.

In conclusion, the Form 1099-SA is a vital piece of the tax equation for anyone using an HSA, MSA, or Medicare Advantage MSA. By understanding how to read, report, and manage this form, you ensure not only tax compliance but also long-term financial health. With total healthcare costs projected to reach $4.7 trillion by 2026 in the U.S., these savings tools, when used properly, are not just smart—they are essential.

Evaluation of IQTaxHub

Pros

Clarifies HSA distribution taxability details
Simplifies reporting for qualified health expenses
Ensures compliance for HSA distributions

Cons

Strict rules confuse some taxpayers
Non-qualified withdrawals incur penalty tax
Errors trigger additional IRS scrutiny

This article written by:

Alex Gavrey

I am a tax author with a passion for ensuring the highest efficiency in tax payments. I have over 12 years of experience in the taxation industry, working with everything from small startups to large enterprises.

Published: April 19, 2025 at 4:43 p.m.
Last modified: April 19, 2025 at 5:05 p.m.
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1099-SA Tax Form: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA FAQ

Find answers in 1099-SA Tax Form: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA frequently asked questions.

The 1099-SA Tax Form is used to report distributions from Health Savings Accounts (HSAs), Archer MSAs, and Medicare Advantage MSAs. It provides detailed data on funds withdrawn for qualified medical expenses and non-qualified use, which may incur a penalty tax, ensuring full IRS compliance.

The 1099-SA is typically issued by the HSA administrator or financial institution managing the account. These entities send the form to both the account holder and the IRS, detailing all distributions made during the tax year and ensuring accurate reporting for compliance purposes.

The 1099-SA includes essential details such as the total amount distributed, the type of account, and the breakdown between funds used for qualified medical expenses versus non-qualified withdrawals. This detailed reporting is crucial for determining taxable amounts and potential penalty tax liabilities.

Non-qualified withdrawals on the 1099-SA are subject to additional tax consequences, including a penalty tax. These amounts, not used for qualified medical expenses, are reported separately to ensure taxpayers properly calculate taxable income and adhere to IRS regulations.

Taxpayers reference the 1099-SA when filing their returns to reconcile HSA distributions. The form’s details help verify that only qualified medical expense withdrawals remain tax-free, while any non-qualified distributions are taxed appropriately, ensuring accurate IRS reporting and assessment.