What’s the purpose of form 5498-SA?
Form 5498-SA reports the total amount of contributions an employee made to a health-related savings account during a given tax year. The IRS requires that anyone who made contributions to an active account receives Form 5498-SA.
What types of accounts require IRS form 5498-SA?
IRS rules require the form for three types of accounts:
- HSAs: These accounts are available to self-employed individuals and those who work for companies that have high-deductible health insurance plans.
- Archer MSAs: These accounts predate HSAs. They’re available to the self-employed and those who work for companies that have high-deductible health insurance plans and 50 or fewer employees.
- Medicare Advantage MSAs: Anyone enrolled in a Medicare Advantage plan is eligible for these accounts. They’re not related to employment status and aren’t usually provided through employers.
Who completes the form?
The trustee of the health-related accounts described above available through an employee benefits cafeteria planis responsible for completing the form. As with pension funds and 401(k) accounts, the trustee is usually an IRS-approved bank, insurance company or other third-party entity. Your employees receive the forms from the trustee your company selected for your HSA or Archer MSA plan.
When does a trustee send a 5498-SA vs. 1099-SA?
IRS Form 1099-SA summarizes distributions from the same types of accounts that require Form 5498-SA for contribution reporting. Trustees only send Form 1099-SA when an employee takes money out of their account to cover medical expenses during a calendar year.
How do employees get the form?
Form 5498-SA is usually sent by mail to the home address an employee listed during the enrollment process. Trustees that offer online banking services may provide access to the form online instead of or in addition to a paper copy.
Are rollovers and transfers reported?
Rollovers between Archer MSA, between HSAs and from Archer MSAs to HSAs are reported. Transfers from IRAs to HSAs are also included in the contribution calculations. If an HSA or Archer MSA is moved to a new trustee but the account number remains the same, the transfer isn’t reported.
What if an account is closed?
Employees who close an account during a given tax year and make no contributions beforehand don’t receive IRS Form 5498-SA.
What if the account holder passed away during the year?
In the event of the account holder’s death, the trustee typically generates Form 5498-SA for the beneficiary.
What are the parts of the form?
- Identifying information: On the left-hand side of the form, the trustee provides their address and tax identification number. The form also lists the account holder’s name, tax identification number, address and account number in this area. On the form, the account holder is referred to as the participant.
- Box 1: The total amount of contributions made by the account holder to an Archer MSA account are entered here. If the account in question is an HSA, the trustee leaves this box blank.
- Box 2: The total amount of contributions made to an Archer MSA or HSA during the tax year are entered here.
- Box 3: Contributions made to an Archer MSA or HSA between the end of the tax year and the tax filing deadline are reported here.
- Box 4: The total amount of any rollovers made to the HSA or Archer MSA go here.
- Box 5: Trustees enter the fair market value in this box. The FMV is the total value of the account at the time the form was completed.
- Box 6: The trustee checks a box here to report whether the account is an HSA, Archer MSA or Medicare Advantage MSA.
Who gets copies of form 5498-SA?
The IRS receives Copy A, and the employee receives Copy B. Both copies have the same boxes and report identical information. Trustees may truncate the account holder’s Social Security number for privacy purposes on Copy B only.
When do employees receive IRS form 5498-SA?
The IRS allows HSA and Archer MSA account holders to make contributions up to the yearly tax filing deadline. Some trustees wait to mail the forms until after the deadline has passed. In this case, employees may receive them in late April or May. Trustees may also generate the forms at the end of the calendar year. Employees who make additional contributions before the tax filing deadline would then receive an updated form.
How does 5498-SA impact a business?
The forms have no impact on your company and don’t affect your ER taxes. Your human resources department may get questions from employees regarding the form. These questions are likely referred to your HSA or MSA plan trustee.
Are company contributions made to employees’ HSA and Archer MSAs included on the form?
Yes, any money your company paid into accounts is reflected in the total contributions box. You would also report the information on your employees’ W-2 forms as a part of their total compensation.
Would an employee ever receive more than one form 5498-SA for a tax year?
IRS rules require trustees to send one form for each account number an employee has on file. Most employees will only have one account number, but those who have two or more accounts would receive a form for each one.
What should employees do with the form when they receive it?
Employees should be advised to review the information on the form and compare it to their own records. If they spot an error, they should notify the trustee.
