The 5498-SA tax form is one of those documents that shows up in your mailbox and immediately makes you wonder: “Do I actually need this?” The answer is yes—and understanding what it means could save you money and headaches during tax season. This form reports your Health Savings Account (HSA) contributions and is essential for anyone managing an HSA as part of their healthcare strategy.
Table of Contents
What Is Form 5498-SA?
Form 5498-SA is the IRS document that your HSA custodian or trustee sends to you and the IRS each year. Think of it as your HSA’s report card—it shows how much money went into your account during the tax year. Unlike some tax forms that feel punitive, this one is actually pretty straightforward. It’s used primarily to verify that your HSA contributions don’t exceed the annual limits set by the IRS.
The form gets filed with the IRS but isn’t typically attached to your tax return. Instead, you use the information on it to fill out other parts of your return, particularly if you’re claiming deductions for HSA contributions made outside of payroll deductions. If your employer deducts HSA contributions directly from your paycheck, the form serves more as a record-keeping tool.
Who Receives This Form?
If you have an HSA with any balance during the year, or if you made contributions to an HSA, your custodian must send you a 5498-SA form by May 31st of the following year. This applies whether your HSA is through your employer, a bank, an insurance company, or any other qualified HSA trustee.
You’ll receive the form even if you didn’t use any HSA funds during the year. The form is required for anyone with an active HSA, period. If you have multiple HSAs (which is possible but requires careful coordination), you should receive a form from each custodian. This is where things can get tricky—the IRS expects your total contributions across all HSAs to stay within the annual limit.
Understanding the Boxes
The 5498-SA form has several boxes, and each one tells a specific part of your HSA story. Let’s break down the key ones:
Box 1 (HSA Contributions): This shows the total amount contributed to your HSA during the calendar year. This includes employer contributions, employee contributions, and catch-up contributions if you’re 55 or older. If you made contributions through payroll deduction, they’ll be listed here.
Box 2 (Employer Contributions): Specifically isolates what your employer contributed. This is important because employer contributions don’t count against your personal contribution limit in the same way.
Box 3 (Contributions Made with Form 8889): If you made contributions outside of payroll (like if you’re self-employed), those appear here.
Box 4 (Fair Market Value): This shows the value of your HSA at the end of the year. It’s purely informational but helps you track your account growth.
Box 5 (Distributions): Shows the total amount you withdrew from your HSA during the year, whether for qualified medical expenses or otherwise.
Box 6 (HSA, Archer MSA, or Medicare Advantage MSA): A checkbox indicating which type of account this is. Most people will see HSA marked here.
HSA Contribution Limits
Understanding contribution limits is critical because exceeding them triggers penalties and taxes. For 2024, the IRS limits are $4,150 for self-only coverage and $8,300 for family coverage. If you’re 55 or older, you can add an extra $1,000 catch-up contribution.
These limits reset each January 1st. If you change jobs mid-year or switch health plans, you don’t get a pro-rated limit—the annual maximum stays the same. This is where the 5498-SA form becomes your best friend. By comparing the contributions shown on the form with the IRS limits, you can verify you haven’t gone over.
If you do exceed the limit, the excess contribution is subject to a 6% excise tax each year it remains in the account. Additionally, the earnings on the excess are taxable. It’s not a catastrophic penalty, but it’s entirely avoidable with proper planning.
Tax Implications Explained
Here’s what makes HSAs special: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. The 5498-SA form helps the IRS verify that you’re playing by these rules.
If you made HSA contributions through your employer’s payroll, those were already excluded from your taxable income—you’ll see this reflected in your W-2 form, not on the 5498-SA. However, if you made contributions directly (perhaps because you’re self-employed), you’ll use the information from Box 3 on your 5498-SA to claim a deduction on your tax return and calculate your AGI.
The distributions shown in Box 5 don’t automatically mean you owe taxes. If those withdrawals were for qualified medical expenses, they’re tax-free. If they weren’t, you’ll owe income tax plus a 20% penalty on the non-qualified portion. This is why keeping receipts for medical expenses is absolutely critical.
Filing Requirements
Do you have to attach the 5498-SA to your tax return? No. The IRS already has a copy because your custodian files it electronically. You keep your copy for your records and use it to verify information on your return.
However, if you made contributions outside of payroll, you’ll need to file Form 8889 (Health Savings Accounts) with your tax return. This is where you report your HSA activity in detail. The 5498-SA provides the supporting documentation for this form.
If your employer made contributions and you made contributions, and your total exceeds the limit, you need to file Form 8889 to report the excess and calculate the resulting taxes and penalties. This is one situation where professional tax help might be worth the investment.
Common Mistakes to Avoid
The most common mistake is ignoring the form entirely. People assume that if their employer deducted HSA contributions from their paycheck, they don’t need to worry about the 5498-SA. While payroll contributions are handled automatically, you still need to verify the amount shown matches what you expect.
Another frequent error is forgetting about multiple HSAs. If you have accounts at two different institutions, each will send a 5498-SA. You must add them together to ensure your total contributions don’t exceed the annual limit. The IRS will catch this if you don’t.
A third mistake is misunderstanding what counts as a “qualified medical expense.” Not all health-related spending qualifies. Over-the-counter medications without a prescription, cosmetic procedures, gym memberships, and vitamins generally don’t qualify. If you withdraw funds for these purposes, you’ll owe taxes and penalties on those amounts.
Finally, people sometimes fail to keep the form and supporting documentation. The IRS can audit your HSA activity years after the fact. Having your 5498-SA forms and receipts for medical expenses is your defense.
Coordination With Medicare
If you’re turning 65 or becoming Medicare-eligible, your HSA situation changes significantly. Once you enroll in Medicare Part A, you can no longer make HSA contributions. Your existing HSA balance remains yours to use, but new contributions are prohibited.
This is important because the 5498-SA form will still show contributions if your custodian doesn’t process your Medicare notification quickly. If you contributed after becoming Medicare-eligible, those excess contributions trigger the 6% excise tax. Always notify your HSA custodian the moment you enroll in Medicare to prevent accidental over-contributions.
Additionally, if you receive Social Security benefits, you cannot make HSA contributions. The rules are strict here, so verify your eligibility before contributing.
Record Keeping Tips
Keep your 5498-SA forms for at least seven years. The IRS can audit tax returns going back three years normally, but HSA-related issues can extend that window. Having documentation protects you.
Create a spreadsheet tracking your HSA activity year by year. Include the contribution amount from the 5498-SA, the distributions you made, and the qualified medical expenses those distributions covered. When tax time arrives, you’ll have everything organized and ready.
Photograph or scan your medical receipts. If you’re withdrawing $5,000 from your HSA for medical expenses, you need proof of those expenses. Digital copies work fine, but make sure they’re legible and clearly dated.
Also, keep copies of any correspondence with your HSA custodian, especially if you’ve had contributions adjusted or if there were any errors on previous 5498-SA forms. If you’ve ever had to file an amended return related to HSA contributions, keep that documentation as well.
Frequently Asked Questions
Do I need to report my 5498-SA on my tax return?
Not directly. The form is informational. However, if you made HSA contributions outside of payroll deductions, you must file Form 8889 with your tax return, and the 5498-SA provides supporting documentation. If all contributions were made through payroll, you don’t need to report it separately—your employer handled it through your W-2.
What happens if my 5498-SA shows the wrong amount?
Contact your HSA custodian immediately. They can issue a corrected form (marked as “CORRECTED”) if there’s an error. You’ll need to file an amended return if the error affected your tax liability. Don’t ignore discrepancies—the IRS will notice if your return doesn’t match what the custodian reported.
Can I contribute to an HSA and a Flexible Spending Account (FSA) in the same year?
No. You cannot be covered by an FSA and contribute to an HSA simultaneously. However, you can have a limited-purpose FSA (which only covers dental and vision) alongside an HSA. The 5498-SA won’t show FSA activity—that’s reported separately on Form 8889.
Is the fair market value on my 5498-SA the same as my HSA balance?
Yes. Box 4 shows your HSA balance as of December 31st of that tax year. This is what you have available to spend or invest in the following year.
What if I received a 5498-SA but don’t remember opening an HSA?
Contact your employer’s benefits department or the custodian listed on the form. Sometimes employers open HSAs for employees automatically. Verify the account is legitimate and in your name. If someone opened an HSA fraudulently in your name, you need to report this immediately.
Do I pay taxes on HSA earnings?
No. Unlike regular savings accounts, earnings within your HSA grow tax-free. If you invest your HSA funds and earn interest or investment gains, those are never taxed as long as the money remains in the account. This is one of the biggest tax advantages of HSAs.
Final Thoughts
The 5498-SA tax form might seem like just another piece of paper, but it’s actually a valuable record of one of the best tax-advantaged accounts available. By understanding what it shows, verifying the amounts are correct, and using it to ensure you’re staying within contribution limits, you’re protecting yourself from costly IRS penalties and maximizing your healthcare savings.
The key is treating your HSA seriously. It’s not just a healthcare account—it’s a retirement savings vehicle with triple tax advantages. The 5498-SA is your proof that you’re using it correctly. Keep it organized, keep your receipts, and keep your records. Your future self will thank you when you need to reference this information years down the line.
If you’re uncertain about anything on your 5498-SA or how it affects your tax situation, especially if you have questions about how it impacts your AGI or if you’ve had changes in your HSA status, consider consulting a tax professional. The cost of clarification is far less than the cost of an audit.
