Key takeaways
- The trustee sends Form 5498-SA for contributions and Form 1099-SA for withdrawals.
- Form 8889 is required for any year with an HSA distribution, even if nothing else needs filing.
- Box 2 of Form 5498-SA includes prior-year contributions made early in the next year, so adjust before using it on line 2.
- The limits are $4,300 self-only and $8,550 family for 2025, and $4,400 self-only and $8,750 family for 2026.
- Qualified medical expense records must show the expense was not paid from another source and not deducted on Schedule A.
Who sends which form
The trustee or custodian issues both forms, not the employer or the client. Form 1099-SA reports money that came out of the HSA, so it exists only if there was a distribution. Form 5498-SA reports contributions and the account value on December 31.
Each plan type gets its own form, so a client with an HSA and an Archer MSA receives separate forms. The IRS instructions say a separate return is required for each plan type.
Employer deposits appear on the client's Form W-2, box 12, with code W. Ask for the W-2 whenever the client says the employer contributed, because Form 8889 line 9 takes the amount from there.
Reading Form 5498-SA without double-counting
Box 2 is the total for the calendar year, and it includes contributions made in the calendar year for the prior year. A 2026 Form 5498-SA can therefore include 2025 contributions the client made in January through April 2026. Nothing on the form labels that amount, so the adjustment has to be made by hand.
For the 2026 contribution on Form 8889 line 2, start with the 2026 box 2, subtract the 2025 box 3 (contributions made in 2026 for 2025), add the 2026 box 3 (contributions made in 2027 for 2026), and subtract any employer amount the trustee included in box 2. Form 8889 line 2 excludes employer contributions and rollovers.
Example: the 2026 box 2 is $4,000, the 2025 box 3 is $1,200, and the 2026 box 3 is $600. The client's W-2 shows employer contributions of $1,000 with code W. Line 2 is the $4,000, less $1,200, plus $600, less the $1,000 of employer money.
Form 8889 line by line
Form 8889 is required for any year the client took an HSA distribution, even when no other return is needed. Part I covers contributions and the deduction. Part II covers distributions and the 20% additional tax.
Line 1 asks which coverage type applied for the longer period, and that choice sets the limit. If coverage changed during the year, use the line 3 limitation chart and worksheet in the instructions.
Line 13 is the deductible contribution, and it moves to Schedule 1 (Form 1040), Part II, line 13. Line 14a takes the total of Form 1099-SA box 1. Line 15 is the amount used for qualified medical expenses, and the client cannot deduct those same expenses on Schedule A.
Lines 17a and 17b apply the 20% additional tax to the part of a distribution that was not used for qualified medical expenses. Check the box on line 17a only if an exception applies, such as death, disability or reaching age 65.
Qualified medical expense records
Distributions used for qualified medical expenses are tax free. Publication 969 says the client must keep records showing three things: the distribution was used only for qualified medical expenses, those expenses were not paid or reimbursed from another source, and they were not claimed as an itemized deduction. The records stay with the client's tax files and are not sent with the return.
The IRS page I checked does not say a receipt is required for every withdrawal. In practice, the proof for each of the three points is an itemized receipt or an explanation of benefits, plus the HSA statement line that matches it. A card swipe at a pharmacy shows the amount, but not what was bought.
If the client paid a provider from the HSA card, ask for the provider's invoice with the patient name, date of service and amount. If the client paid out of pocket and reimbursed themselves from the HSA later, ask for the original receipt and the payment date, then find the matching transaction on the HSA statement.
Failure mode: the client has a Form 1099-SA showing $3,000 of distributions and receipts for only part of it. The part without support is not a qualified medical expense, so it goes on line 17b with the 20% tax. Tell the client before filing, not after a notice arrives.
Contribution limits for 2025 and 2026
For 2025, the HSA limit is $4,300 for self-only HDHP coverage and $8,550 for family coverage. For 2026, the limits are $4,400 for self-only and $8,750 for family. Publication 969 lists both years, and a contribution counts toward the year it is made for, which can be the prior year.
The age 55 catch-up is an additional $1,000 on top of the base limit for an account holder who is 55 or older at the end of the tax year. For 2025, the Form 8889 instructions show $5,300 for a self-only account holder age 55 or older. Married individuals who are both 55 or older with family coverage cannot contribute more than $10,550 combined for 2025.
The page I checked does not give the 2026 combined figure for two catch-up spouses, so confirm it in the 2026 Publication 969 before quoting it. A client who turns 55 late in the year still gets the full catch-up, because the test is age at year end.
If the client is HDHP-eligible on December 1, the last-month rule treats them as eligible for the whole year. They must then stay eligible through the testing period, which runs to the last day of the 12th month after December. Losing eligibility in that window adds the amount to income and a 10% additional tax, reported in Form 8889 Part III.
Deadlines by tax year
For 2025 contributions, the deadline was April 15, 2026, which is the 2025 Form 1040 due date for calendar-year filers. For 2026 contributions, the deadline follows the 2026 return due date. Confirm that date on the IRS's 2026 filing pages before you tell the client.
Form 5498-SA for 2025 was due to the IRS by June 1, 2026, because the May 31 deadline moved to the next business day. For 2026, the trustee's deadline is June 1, 2027, because May 31, 2027 is Memorial Day. Because the trustee may send the form that late, set that date with the client at intake rather than in April.
For 2025 information returns, the general instructions list March 2, 2026 for paper filing and March 31, 2026 for e-filing of Form 1099-SA. The 2026 dates will be set in the 2026 instructions. The e-file rule applies at 10 or more information returns in total, counted across all types.
Mistaken distributions and corrections
A distribution made because of a reasonable mistake of fact can be repaid no later than the due date of the tax return, not counting extensions, for the first year the client knew or should have known of the mistake. The repaid amount is not included in gross income and is not subject to the 20% additional tax.
The trustee does not have to allow the repayment. If it does, the trustee may rely on the client's statement that the distribution was a mistake. Do not report the mistaken distribution on Form 1099-SA, and do not record the repayment as a contribution on Form 5498-SA.
Decision rule: if a Form 1099-SA already shows a mistaken distribution, ask the trustee for a corrected form, and keep the client's written statement and the repayment confirmation. The IRS says to correct a filed form with the IRS and the beneficiary once the error is known.
When the account holder dies
In the year of death, the trustee reports the gross distribution in box 1, code 4 in box 3 and the date-of-death fair market value in box 4. If the surviving spouse is the beneficiary, the spouse becomes the account holder and the account does not end.
For a distribution after the year of death, the trustee uses code 1 for a spouse, code 4 for an estate and code 6 for a nonspouse beneficiary who is not an estate. Box 4 is reduced by qualified medical expense payments made within one year after death.