What Form 1099-SA?

Form 1099-SA is a United States (U.S.) tax form utilized to document distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage medical savings account (MA MSA). The purpose of Form 1099-SA is to track and report the amount of money an individual expends from their account.

What is Form 1099-SA used for?

Example Usage: For example, if someone experiences an injury that requires medical attention and uses funds from their HSA to pay for the medical bills, the HSA provider will send that individual a 1099-SA form that specifies the total amount they spent from their account. This helps individuals properly report medical expenses on their income tax returns.

Why is 1099-SA important?

A 1099-SA is particularly significant given that only qualified medical expenses, which are tax-free, should be documented in the form. Any expenditure from HSAs, Archer MSAs, or MA MSAs that do not meet defined criteria could face a 20% tax penalty. As such, clarity around which expenses qualify as medical and are exempt from taxes is essential.

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