HSA Tax Forms Explained: 1099-SA, 5498-SA, and Form 8889

Three tax forms handle a Health Savings Account: Form 1099-SA reports money that came out, Form 5498-SA reports money that went in, and Form 8889 is the one you fill out and attach to your Form 1040. Your HSA custodian produces the first two automatically. The third is on you, and it is the only one the IRS actually needs with your return.

Form 1099-SA: Distributions Out of Your HSA

Your custodian sends Form 1099-SA after any year in which you took money out of the account. Box 1 shows the total distributed. Box 3 carries a distribution code that tells the IRS what kind of withdrawal it was: Code 1 for a normal distribution, Code 2 for a withdrawal of excess contributions, and Code 5 for a prohibited transaction.¹

You do not mail this form to the IRS. You keep it and use the numbers on it to complete Part II of Form 8889. If a figure looks wrong, ask your custodian for a corrected version with the “CORRECTED” box checked rather than filing with numbers you know are off.

Form 5498-SA: Contributions Into Your HSA

Form 5498-SA records everything that went into the account for the year: your own deposits, employer contributions, and any rollovers. The awkward part is timing. Custodians have until May 31 of the following year to send it, well after the April filing deadline.¹

If you file before it arrives, use your own year-end statement and payroll records to complete Form 8889. When the form does show up, check it against what you reported. If the numbers do not match, file an amendment.

Form 8889: The One You File

Form 8889 is the return-level form. It attaches to your Form 1040, pulls in the totals from your 1099-SA and 5498-SA, and calculates your deduction, your taxable distributions, and any penalties.² Anyone who contributed to an HSA, received employer HSA contributions, or took a distribution during the year has to file it. Married couples each file their own, even when both are on family coverage.

Part I: Contributions and Your Deduction

Part I is where the deduction happens. You enter the amount you personally contributed (not counting employer contributions, which get their own line), and the form walks you through comparing that against your annual limit for your coverage type and months of eligibility. If your combined personal and employer contributions stayed under the cap, your personal contributions come off your taxable income. Employer contributions are not deductible here because they were already excluded from your wages.

Part II: Distributions

Part II has to account for every dollar shown on your 1099-SA. You split the total between distributions used for qualified medical expenses, which stay tax-free, and everything else, which gets added to your taxable income. Non-qualified withdrawals also carry a 20% additional tax if you are under 65. That penalty falls away at 65 or if you become disabled; non-medical withdrawals after 65 are taxed as ordinary income only.³ Qualified expenses generally follow the list in Publication 502.⁴

Part III: Failed Testing Period

Part III only fills in if you used the last-month rule or received a qualified HSA funding distribution and then lost eligibility during the testing period that follows. When that happens, the section calculates the amount added back to income and the 10% additional tax on it.⁵

2026 Contribution Limits

To contribute at all, you have to be enrolled in a high-deductible health plan. For 2026, the HDHP has to carry a deductible of at least $1,700 for self-only coverage or $3,400 for family coverage, and its out-of-pocket maximum cannot exceed $8,500 self-only or $17,000 family.⁶

If you qualify, the 2026 contribution limits are:

Self-only coverage: $4,400
Family coverage: $8,750
Catch-up contribution at age 55 or older: an additional $1,000

These caps cover the combined total of your personal and employer contributions.⁶ The $1,000 catch-up is set by statute and does not adjust for inflation.³ You have until the April filing deadline to make contributions for the prior tax year; 2026 contributions can go in through April 15, 2027.⁷

If you were not on an HDHP for the entire year, your limit is prorated month by month using the Line 3 Limitation Chart in the Form 8889 instructions.⁵ Any month you were enrolled in Medicare counts as zero. When both spouses have their own HSAs and at least one is on a family HDHP, both are treated as family-covered and the family limit is split between them by agreement (or evenly if they do not decide); catch-up amounts always go into the age-55 spouse’s own account.⁸

The Last-Month Rule

If you are eligible on December 1 of the tax year, the last-month rule lets you contribute the full annual amount as if you had been eligible all year.³ The catch is a testing period. You have to stay HDHP-eligible from that December 1 through December 31 of the following year. Fall out mid-way (a new job with a non-HDHP plan is the common trigger) and the extra contributions come back into your income with a 10% additional tax on top, reported in Part III of Form 8889. Loss of eligibility because of disability or death is excepted.⁵

Excess Contributions

Going over the limit is easy, especially when employer contributions push a well-planned personal contribution past the cap. If the excess sits in the account past your filing deadline, a 6% excise tax hits the overage every year it stays there.⁹

The clean fix is to pull the excess out (along with any earnings on it) before the filing deadline, including extensions. Only the earnings portion is taxable, and the 6% penalty does not apply. Your custodian issues a 1099-SA with distribution Code 2 to flag the withdrawal.¹ If you miss the window, the 6% tax gets reported on Form 5329 and keeps applying every year until you either withdraw the excess or absorb it with unused contribution room in a later year.¹⁰

Rollovers and Transfers Between Custodians

A trustee-to-trustee transfer moves the funds directly from one HSA custodian to another. It does not appear on Form 8889, does not count as a distribution or contribution, and has no annual limit.⁷

An indirect rollover is different. The custodian pays the money to you, and you have 60 days to deposit it into another HSA. You are limited to one rollover per 12-month period. Your old custodian reports the payout on 1099-SA, and you have to report the rollover on Form 8889 to show the IRS it was not a taxable withdrawal. Miss the 60 days and the whole amount is a taxable distribution, plus the 20% penalty if you are under 65.⁷ When it is available, the direct trustee-to-trustee transfer avoids the whole tangle.

Medicare and Your HSA

Enrolling in any part of Medicare ends your ability to contribute. This trips people up at 65 because Social Security enrollment automatically enrolls you in Part A, and that enrollment is retroactive by up to six months. The standard guidance is to stop HSA contributions six months before you apply for Social Security or Medicare to avoid creating excess contributions.¹¹ Money already in the account is still available tax-free for qualified expenses, including Medicare premiums. On Form 8889, months in which you were enrolled in Medicare count as zero for the contribution limit.⁵

Filing, Deadlines, and Records

Form 8889 goes with your Form 1040 by the standard April deadline.² File late while owing tax and the failure-to-file penalty runs 5% of the unpaid tax per month, capped at 25%.¹²

The 1099-SA and 5498-SA stay in your files. Keep them alongside receipts for every medical expense you paid with HSA money. The IRS has three years from your filing date to audit most returns, so hold the records at least that long.¹³ One boundary worth flagging: an HSA inherited by anyone other than a spouse stops being an HSA on the date of death, and the full fair market value becomes taxable to the beneficiary.³ That reporting sits outside Form 8889.

1
Internal Revenue Service. Instructions for Forms 1099-SA and 5498-SA
2
Internal Revenue Service. Form 8889 – Health Savings Accounts
3
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
4
Internal Revenue Service. Publication 502 – Medical and Dental Expenses
5
Internal Revenue Service. Instructions for Form 8889
6
Internal Revenue Service. Revenue Procedure 2025-19
7
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
8
Internal Revenue Service. Adjustments to Income Workout
9
Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities
10
Internal Revenue Service. Instructions for Form 5329
11
Medicare.gov. Working Past 65
12
Internal Revenue Service. Failure to File Penalty
13
Internal Revenue Service. Topic No. 305, Recordkeeping