If you received a Form 1099-SA, you'll need to enter it in the Health Savings Account (HSA) section of your tax return. This form reports distributions from an HSA, Archer MSA, or Medicare Advantage MSA. Entering it correctly helps ensure that qualified medical expense withdrawals remain tax-free.
How to Enter Form 1099-SA
In the program, navigate to:
- Federal
- Deductions
- Adjustments to Income
- Health Savings Accounts (HSAs)
- Scroll down to Distributions
Box 1: Gross Distribution
Enter the total amount shown in Box 1 of Form 1099-SA.
This amount represents all distributions received during the tax year from your HSA and is reported on Form 8889, Line 14a.
Your total distributions may include:
- Amounts paid using an HSA debit card
- Direct payments made from the account for medical expenses
- Amounts withdrawn by individuals you authorized to access the account
Distributions Used for Qualified Medical Expenses
Enter the portion of your HSA distributions that was used to pay qualified medical expenses. This amount is reported on Form 8889, Line 15.
Qualified medical expenses generally include unreimbursed medical costs incurred after the HSA was established for:
- You
- Your spouse
- Your dependents
- Certain individuals who would qualify as your dependent except for specific IRS dependency rules
Do not include:
- Excess contributions withdrawn after the tax return due date (including extensions), even if the funds were used for medical expenses
Important: If you leave this field blank, the program will treat the entire distribution as taxable.
Box 2: Earnings on Excess Contributions
Box 2 reports earnings distributed with excess HSA or Archer MSA contributions that were returned by the due date of your tax return.
Keep in mind:
- The Box 2 amount is already included in the Box 1 distribution.
- If Box 2 contains earnings on excess contributions, Box 3 typically shows Distribution Code 2.
You should:
- Report the earnings as Other Income on your tax return.
- Complete Form 5329 to report excess contributions and any applicable penalties.
Box 3: Distribution Code: Not Supported in program
Distribution codes shown in Box 3 are not supported by the program. However, understanding the code can help you determine how the distribution should be treated.
| 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. |
| 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 |
| 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. |
| 5—Prohibited transaction | See sections 220(e)(2) and 223(e)(2). |
| 6—Death distribution after year of death to a non-spouse beneficiary | Use this code for payments to a decedent's non-spouse beneficiary, other than an estate, after the year of death. |
Box 4: FMV on date of death-Not supported in program
Box 5: Checkbox- Not supported in program
Check the box to indicate whether the distribution was from an HSA, Archer MSA, or MA MSA. This box simply identifies the type of account associated with the distribution and is for informational purposes only.