Form 1099-SA vs 5498-SA: Form 8889, Rollovers, and Excess Contributions

Form 1099-SA and Form 5498-SA are the two IRS forms your HSA or MSA custodian sends each year, and they report opposite sides of the same account: 1099-SA covers the money that came out, and 5498-SA covers the money that went in. Both forms flow onto IRS Form 8889 when you file, but they arrive on different schedules and answer different questions. Knowing which numbers to pull from which form is what keeps a health savings account tax-free in practice, not just on paper.

The Short Version

The 1099-SA reports distributions. Every dollar withdrawn from your HSA, Archer MSA, or Medicare Advantage MSA during the calendar year shows up here, along with a code telling the IRS what kind of withdrawal it was.¹ The form does not say whether you spent the money on medical care. You prove that separately.

The 5498-SA reports contributions. It shows what you put in, what your employer put in, any rollovers, and the account’s year-end value.¹ Because contributions made between January 1 and the April filing deadline can still count toward the prior tax year, custodians often don’t send the 5498-SA until late May. You’ll usually file your return before it arrives, working from your own contribution records.

Both forms apply to the same three account types: Health Savings Accounts, Archer MSAs, and Medicare Advantage MSAs. A checkbox on each form identifies which one.

What’s on Form 1099-SA

The 1099-SA has five boxes that matter:

Box 1, Gross Distribution: the total withdrawn during the year, before anyone decides whether it’s taxable.
Box 2, Earnings on Excess Contributions: the earnings pulled out along with an excess contribution you corrected. Zero if that didn’t happen.
Box 3, Distribution Code: a one-digit code classifying the withdrawal.
Box 4, FMV on Date of Death: the account value on the date the account holder died, if that applies.
Box 5: the checkbox indicating HSA, Archer MSA, or Medicare Advantage MSA.

Box 3 decides how the distribution gets taxed. There are six codes:¹

Code 1, Normal distribution: the default for withdrawals to the account holder, including direct payments to providers.
Code 2, Excess contributions: the withdrawn amount was an excess contribution being corrected.
Code 3, Disability: the distribution followed the account holder’s disability.
Code 4, Death distribution: payment to the estate, after the year of death.
Code 5, Prohibited transaction: the account was used in a way IRS rules forbid, such as pledging it as collateral.
Code 6, Death distribution to nonspouse beneficiary: payment to a non-spouse beneficiary after the year of death.

Qualified vs. Non-Qualified

A distribution spent on unreimbursed medical expenses under Section 213(d) of the Internal Revenue Code is tax-free. That covers diagnosis, treatment, and prevention of disease, plus prescription drugs, over-the-counter medications, and menstrual care products.²

A distribution used for anything else is added to your gross income and taxed at your ordinary rate. An additional 20% tax applies unless you’ve reached age 65, become disabled, or the distribution is made after your death.³ Past 65, non-qualified withdrawals are still taxed as income, but the 20% penalty is gone, and the HSA behaves like a traditional retirement account for non-medical spending.²

The 1099-SA won’t sort qualified from non-qualified for you. You need receipts. If you can’t produce records showing a withdrawal paid for a qualifying expense, the entire amount is treated as non-qualified.

What’s on Form 5498-SA

The 5498-SA also has five boxes worth knowing:

Box 1, Employee/Account Holder Contributions: your total regular contributions for the tax year, including deposits made between January 1 and the April deadline that you designated for the prior year.
Box 2, Employer Contributions: what your employer contributed, including amounts run through a cafeteria plan. These reduce your allowable deduction dollar for dollar because they’re already excluded from your income.
Box 3, Total MA MSA Contributions: what Medicare deposited into a Medicare Advantage MSA.
Box 4, Rollover Contributions: amounts rolled over from another HSA or Archer MSA. Rollovers don’t count against the annual limit and aren’t taxable.
Box 5, Fair Market Value: the account’s value on December 31.

For 2026, the annual contribution limit is $4,400 with self-only HDHP coverage or $8,750 with family coverage.⁴ If you’re 55 or older and not yet on Medicare, you can add a $1,000 catch-up contribution.² Personal contributions (Box 1) are deductible above the line, so you get the benefit whether you itemize or not.

How Both Forms Feed Form 8889

Anyone who contributed to an HSA, received an HSA contribution, or took a distribution during the year must file Form 8889 with their return.⁵ The form has three parts, and each pulls from a specific place.

Part I: The Deduction

Part I comes from the 5498-SA. You enter your personal contributions (Box 1), your employer’s contributions (Box 2), and the annual limit that applies to you. Your deduction is your personal contributions up to the limit, minus what your employer already contributed. The result flows to Schedule 1 of your Form 1040.

Part II: The Distributions

Part II comes from the 1099-SA. You enter the gross distribution from Box 1, then report how much of that went to qualified medical expenses. The difference becomes taxable income, and any 20% additional tax on the non-qualified portion is calculated here and carried to Schedule 2.²

Part III: The Testing Period

Part III applies only if you used the last-month rule or made a qualified HSA funding distribution. The last-month rule lets you contribute the full annual limit if you were HSA-eligible on December 1, even if you weren’t eligible all year. In exchange, you have to stay eligible from December 1 through December 31 of the following year. If you lose eligibility during that 13-month window, the extra contributions get added back to income, plus a 10% additional tax.⁶

Where the Two Forms Can Collide

Excess Contributions

Going over your annual limit creates an excess contribution, and leaving it in the account triggers a 6% excise tax each year until it’s corrected.⁷ You avoid the penalty by withdrawing the excess plus its earnings before the tax filing deadline, including extensions. When you do, the 1099-SA shows the withdrawn amount in Box 1, the earnings in Box 2, and Code 2 in Box 3.¹ The earnings portion is taxable in the year the excess was contributed. Miss the deadline and you’ll owe the 6% and report it on Form 5329.

Rollovers vs. Trustee-to-Trustee Transfers

A direct trustee-to-trustee transfer sends funds from one HSA custodian to another without touching your hands. Nothing appears on a 1099-SA, no rollover entry appears on the 5498-SA, and there’s no annual limit on how often you do it.¹

A rollover works differently. The old custodian pays the funds to you, and you have 60 days to deposit them into a new HSA. That triggers a 1099-SA from the distributing custodian (Code 1) and a Box 4 entry on the new custodian’s 5498-SA. Miss the 60 days and the whole amount becomes a taxable distribution, with the 20% penalty possible on top. You’re also limited to one rollover per 12-month period.² When you’re switching custodians, the trustee-to-trustee transfer is the cleaner path.

Mismatches

Custodians make mistakes. If a dollar amount or a distribution code doesn’t match your records, contact the custodian and ask for a corrected form. If the IRS receives a 1099-SA showing a distribution that doesn’t match what you reported on Form 8889, an automated notice usually follows. Sorting it out before filing is easier than answering a notice later.

Employer contributions are a common place for the numbers to disagree. Your W-2 Box 12 (code W) should match Box 2 of your 5498-SA. When those two disagree, resolve it before you file.

What the Forms Don’t Do

Neither form tracks eligibility. Neither form proves a withdrawal was medical. That work falls on you, and the IRS can ask for documentation years later.

For every distribution, keep the receipt or explanation of benefits showing the expense, the date of service, and who received care. Match each receipt to the withdrawal it covers. For contributions, keep records of every deposit date and amount, particularly prior-year deposits made between January and April that get allocated back to the earlier tax year.

Because the 5498-SA often lands after the filing deadline, you’ll often file from your own contribution records and see the form later. Checking your custodian’s portal before you file usually catches any discrepancy in time. Keep the original and any corrected forms with your tax records for at least three years from the filing date, and hold receipts for qualified medical expenses indefinitely: the IRS doesn’t set a time limit on when you can reimburse yourself from an HSA for a past expense.

1
Internal Revenue Service. Instructions for Forms 1099-SA and 5498-SA
2
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
3
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
4
Internal Revenue Service. Rev. Proc. 2025-19
5
Internal Revenue Service. About Form 8889 – Health Savings Accounts (HSAs)
6
Internal Revenue Service. Instructions for Form 8889
7
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities