HSA, Archer MSA, or Medicare Advantage MSA Information

2011

Instructions for Forms
1099-SA and 5498-SA

Department of the Treasury
Internal Revenue Service

Section references are to the Internal Revenue Code unless
otherwise noted.

See Corrected Returns on Paper Forms in the 2011 General
Instructions for Certain Information Returns for more information.

What’s New

Death of Account Holder

Pilot program for truncating an individual’s identifying number
on paper payee statements has ended. Filers of Forms 1099-SA
and 5498-SA must show the recipient’s (Form 1099-SA) and
participant’s (Form 5498-SA) complete identifying numbers on all
copies of the forms.
Withdrawals of excess employer contributions and earnings
on them from employee HSAs. Excess employer contributions
(and the earnings on them) withdrawn from employee HSAs by the
employer should not be reported as a distribution on Form 1099-SA
or as a contribution on Form 5498-SA.

Reminder

In addition to these specific instructions, you should also use the
2011 General Instructions for Certain Information Returns (Forms
1097, 1098, 1099, 3921, 3922, 5498, and W-2G). Those general
instructions include information about the following topics.
• Backup withholding.
• Electronic reporting requirements.
• Penalties.
• Who must file (nominee/middleman).
• When and where to file.
• Taxpayer identification numbers.
• Statements to recipients.
• Corrected and void returns.
• Other general topics.
You can get the general instructions from IRS.gov or by calling
1-800-TAX-FORM (1-800-829-3676).

Specific Instructions for Form 1099-SA

File Form 1099-SA, Distributions From an HSA, Archer MSA, or
Medicare Advantage MSA, to report distributions made from an
HSA, Archer MSA, or Medicare Advantage MSA (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.
Transfers. Do not report a trustee-to-trustee transfer from one
Archer MSA or MA MSA to another Archer MSA or MA MSA, one
Archer MSA to an HSA, or from one HSA to another HSA. For
reporting purposes, contributions and rollovers do not include
transfers.
HSA mistaken distributions. If amounts were distributed during
the year from an HSA because of a mistake of fact due to
reasonable cause, the account beneficiary may repay the mistaken
distribution no later than April 15 following the first year the account
beneficiary knew or should have known the distribution was a
mistake. For example, the account beneficiary reasonably, but
mistakenly, believed that an expense was a qualified medical
expense and was reimbursed for that expense from the HSA. The
account beneficiary then repays the mistaken distribution to the
HSA.
Under these circumstances, the distribution is not included in
gross income, is not subject to the 10 percent additional tax, and
the payment is not subject to the excise tax on excess
contributions. Do not treat the repayment as a contribution on Form
5498-SA.
As the trustee or custodian, you do not have to allow
beneficiaries to return a mistaken distribution to the HSA.
However, if you do allow the return of the mistaken
distribution, you may rely on the account beneficiary’s statement
that the distribution was in fact a mistake. See Notice 2004-50,
2004-33 I.R.B. 196, Q/A-76, available at www.irs.gov/irb/
2004-33_IRB/ar08.html. Do not report the mistaken distribution on
Form 1099-SA. Correct any filed Form 1099-SA with the IRS and
the account beneficiary as soon as you become aware of the error.
TIP

Archer MSAs and MA MSAs. If the account holder dies and the
designated beneficiary is the spouse:
• The spouse becomes the account holder of the Archer MSA,
• An MA MSA is treated as an Archer MSA of the spouse for
distribution purposes, and
• Distributions from these accounts are subject to the rules that
apply to Archer MSAs.
If the designated beneficiary is not the spouse or there is no
named beneficiary, the account ceases to be an MSA as of the
date of death and the fair market value (FMV) on that date is
reported.
If there is more than one recipient, the FMV should be allocated
among them, as appropriate.
If the beneficiary is the estate, enter the estate’s name and
taxpayer identification number (TIN) in place of the recipient’s on
the form.
Distribution in year of death. If you learn of the account
holder’s death and make a distribution to the beneficiary in the year
of death, issue a Form 1099-SA and enter in:
• Box 1, the gross distribution;
• Box 3, code 4 (see page 2); and
• Box 4, the FMV of the account on the date of death.
Distribution after year of death. If you learn of the death of
the account holder and make a distribution after the year of death,
issue a Form 1099-SA in the year you learned of the death of the
account holder. Enter in:
• Box 1, the gross distribution;
• Box 3, one of the following codes (see page 2):
1 — if the beneficiary is the spouse,
4 — if the beneficiary is the estate, or
6 — if the beneficiary is not the spouse or estate;
• Box 4, the FMV of the account on the date of death.
HSAs. If the account holder dies and:
• The designated beneficiary is the surviving spouse, the spouse
becomes the account holder of the HSA.
• The spouse is not the designated beneficiary, the account
ceases to be an HSA on the date of the account holder’s death.
The FMV of the account as of the date of death is required to be
reported in box 4. Follow the rules and coding above under
Distribution in year of death and Distribution after year of death.

Statements to Recipients

If you are required to file Form 1099-SA, you must provide a
statement to the recipient. For more information about the
requirement to furnish a Form 1099-SA or acceptable substitute
statement to recipients, see part M in the 2011 General Instructions
for Certain Information Returns.

Account Number

The account number is required if you have multiple accounts for a
recipient for whom you are filing more than one Form 1099-SA.
Additionally, the IRS encourages you to designate an account
number for all Forms 1099-SA that you file. See part L in the 2011
General Instructions for Certain Information Returns.

Box 1. Gross Distribution

Enter the total amount of the distribution. Include any earnings
separately reported in box 2. You are not required to determine the
taxable amount of a distribution. Do not report a negative amount in
box 1. Do not report the withdrawal of excess employer
contributions (and the earnings on them) returned to an employer
as a distribution from an employee’s HSA. Do not report excess MA
MSA contributions returned to the Secretary of Health and Human
Services or his or her representative.

Cat. No. 38470S

Box 2. Earnings on Excess Contributions

you need not file Form 5498-SA nor furnish a statement to the
participant to reflect that the FMV on December 31 was zero.

Enter the total earnings distributed with any excess HSA or Archer
MSA contributions returned by the due date of the account holder’s
tax return. Include this amount in box 1. Report earnings on other
distributions only in box 1.
For HSAs and Archer MSAs, if you are reporting earnings
TIP on a distribution of excess contributions, use the method
under Regulations section 1.408-11 for calculating the net
income attributable to IRA contributions that are distributed as a
returned contribution. If the amount in box 2 includes earnings on
excess contributions, enter distribution code 2 in box 3.

Death of Account Holder

In the year an HSA, Archer MSA, or MA MSA owner dies, generally
you must file a Form 5498-SA and furnish a statement for the
decedent. If the designated beneficiary is the spouse:
• The spouse becomes the account holder of the HSA or Archer
MSA.
• An MA MSA is treated as an Archer MSA of the spouse for
distribution purposes, but no new contributions may be made to the
account.
If the designated beneficiary is not the spouse or there is no
designated beneficiary, the account ceases to be an HSA, Archer
MSA, or MA MSA.

Box 3. Distribution Code

Enter the appropriate distribution code from the list below that
shows the type of distribution.
1 — Normal distributions

Use this code for normal distributions to
the account holder and any direct
payments to a medical service provider.
Use this code if no other code applies.
Also, see Distribution after year of death
on page 1.

2 — Excess contributions

Use this code for distributions of excess
HSA or Archer MSA contributions to the
account holder.

3 — Disability

Use this code if you made distributions
after the account holder was disabled
(see section 72(m)(7)).

4 — Death distribution
other than code 6

Use this code for payments to a
decedent’s estate in the year of death.
Also use this code for payments to an
estate after the year of death. Do not use
with code 6. See Death of Account Holder
on page 1.

5 — Prohibited transaction

See sections 220(e)(2) and 223(e)(2).

6 — Death distribution after
year of death to a
nonspouse beneficiary

Use this code for payments to a
decedent’s nonspouse beneficiary, other
than an estate, after the year of death. Do
not use with code 4.

Statements to Participants

If you are required to file Form 5498-SA, you must provide a
statement to the participant (generally Copy B) by May 31, 2012.
You may, but you are not required to, provide participants with a
statement of the December 31, 2011, FMV of the participant’s
account by January 31, 2012. For more information about
statements to participants, see part M in the 2011 General
Instructions for Certain Information Returns.
If you furnished a statement of the FMV of the account to the
participant by January 31, 2012, and no reportable contributions,
including rollovers, were made for 2011, you need not furnish
another statement (or Form 5498-SA) to the participant to report
zero contributions. However, you must file Form 5498-SA with the
IRS by May 31, 2012, to report the December 31, 2011, FMV of the
account.
If you do not furnish another statement to the participant
because no reportable contributions were made for the
CAUTION
year, the statement of the FMV of the account must contain
a legend designating which information is being furnished to the
Internal Revenue Service.

!

Account Number

The account number is required if you have multiple accounts for a
recipient for whom you are filing more than one Form 5498-SA.
Additionally, the IRS encourages you to designate an account
number for all Forms 5498-SA that you file. See part L in the 2011
General Instructions for Certain Information Returns.

Box 4. FMV on Date of Death

Enter the FMV of the account on the date of death. See Death of
Account Holder on page 1.

Box 1. Employee or Self-Employed Person’s Archer
MSA Contributions Made in 2011 and 2012 for 2011

Box 5. Checkbox

Check the box to indicate if this distribution was from an HSA,
Archer MSA, or MA MSA.

Enter the employee’s or self-employed person’s regular
contributions to the Archer MSA made in 2011 and through April
17, 2012, for 2011. Report gross contributions, including any
excess contributions, even if the excess contributions were
withdrawn. No HSA information is to be reported in box 1.

Specific Instructions for Form 5498-SA

File Form 5498-SA, HSA, Archer MSA, or Medicare Advantage
MSA Information, with the IRS on or before May 31, 2012, for each
person for whom you maintained an HSA, Archer MSA, or
Medicare Advantage MSA (MA MSA) during 2011. You are
required to file if you are the trustee or custodian of an HSA, Archer
MSA, or MA MSA. A separate form is required for each type of
plan.
For HSA or Archer MSA contributions made between January 1,
2012, and April 17, 2012, you should obtain the participant’s
designation of the year for which the contributions are made.
For repayment of a mistaken distribution amount, see HSA
mistaken distributions on page 1.

Box 2. Total Contributions Made in 2011

Enter the total HSA or Archer MSA contributions made in 2011.
Include any contribution made in 2011 for 2010. Also include
qualified HSA funding distributions (trustee-to-trustee transfers from
an IRA to an HSA under section 408(d)(9)) received by you during
2011. Any excess employer contributions (and the earnings on
them) withdrawn by the employer pursuant to Notice 2008-59, Q/A
24, available at www.irs.gov/irb/2008-29_IRB/ar11.html, should not
be reported as a contribution. You may, but you are not required to,
report the total MA MSA contributions the Secretary of Health and
Human Services or his or her representative made in 2011. Do not
include amounts reported in box 4.

Box 3. Total HSA or Archer MSA Contributions Made
in 2012 for 2011

Rollovers

You must report the receipt of a rollover from one Archer MSA to
another Archer MSA, and receipt of a rollover from an Archer MSA
or an HSA to an HSA in box 4.

Enter the total HSA or Archer MSA contributions made in 2012 for
2011.

Box 4. Rollover Contributions

Transfers

Enter rollover contributions to the HSA or Archer MSA received by
you during 2011. Include qualified HSA distributions (direct
transfers of employer contributions from FSAs and HRAs to an
HSA under section 106(e)). These amounts are not to be included
in box 2.

Do not report a trustee-to-trustee transfer from one Archer MSA or
MA MSA to another Archer MSA or MA MSA, from an Archer MSA
to an HSA, or from one HSA to another HSA. For reporting
purposes, contributions and rollovers do not include these
transfers. However, see box 2 on this page for the reporting of a
trustee-to-trustee transfer from an IRA to an HSA and box 4 for the
reporting of a direct transfer of employer contributions from a health
reimbursement arrangement (HRA) or health flexible spending
arrangement (FSA) to an HSA.

Box 5. Fair Market Value of HSA, Archer MSA, or MA
MSA
Enter the FMV of the account on December 31, 2011.

Box 6. Checkbox

Total Distribution, No Contributions

Check the box to indicate if this account is an HSA, Archer MSA, or
MA MSA.

Generally, if a total distribution was made from an HSA or Archer
MSA during the year and no contributions were made for that year,

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Instructions for Forms 1099-SA and 5498-SA (2011)