HSAs and Taxes: What account holders should know
It’s tax time again! If you have an HSA, you are required to report any contributions made to your HSA and any distributions received from your HSA during the 2022 calendar year. Specifically, you are required to report this information on Form 8889,* which is to be filed as an attachment to your Form 1040. The HSA information you need to include in your tax return will be made available to you as described below.
You will receive a Form W-2 from your employer or your employer’s payroll vendor. This form should identify any pre-tax contributions (made by you and/or your employer) to your HSA during 2022. The information will be shown in Box 12 (under a, b, c or d) and designated with code W.
- Note: If you made any other HSA contributions (i.e., in addition to the contributions that ran through your employer’s payroll system), those additional contributions will not be reflected on your Form W-2. However, you are required to identify the amount of such contributions on your tax return.
- Did you know? If your 2022 HSA contributions are less than the maximum amount permitted for the year (generally, $3,650 for self-only coverage and $7,300 for family coverage), you may be permitted to make additional contributions for the 2022 tax year. However, any such contributions must be made no later than your April 18th tax deadline. If you decide to make additional contributions, you will need to act promptly to ensure there is sufficient time for the transfer of funds to your account and for the timely completion of your tax return. Be sure to include the additional contributions on your tax forms.
The custodial bank is required to report certain contribution information relating to your HSA (i.e., the total contributions made during 2022 and the fair market value of your HSA as of December 31, 2022). The bank reports this information on Form 5498-SA, which it files with the IRS. A copy of the Form 5498-SA relating to your HSA is available on the ProBenefits web portal.**
- Note: Box 2 on Form 5498-SA will include all amounts contributed during 2022, even if you elected to apply a portion of those contributions to the 2021 tax year. Therefore, in completing your tax return, you should refer to your Form W-2 to identify the amount of pre-tax contributions made during 2022.
The custodial bank is also required to report distributions made from your HSA during 2022. The bank reports this information on Form 1099-SA, which it files with the IRS. A copy of the Form 1099-SA relating to your HSA is available on the ProBenefits web portal.**
- Note: If you did not receive any HSA distributions during 2022, a Form 1099-SA will not be posted to your account.
You should receive email notifications from ProBenefits when Form 5498-SA and Form 1099-SA are posted on the ProBenefits web portal. Please confirm that the correct email address is listed on your account to ensure the timely receipt of important notifications about your HSA.
If you are in need of a general refresher on HSAs, our “Getting started with your new HSA” guide has a lot of great information. And of course you can always contact us with any questions.
*For more information relating to Form 8889, you may wish to refer to IRS Instructions for Form 8889 or contact your tax consultant.
**Log into your account, go to Tools & Support, and look for HSA Tax Documents in the Forms section. You can also find these in the Message Center on your account. If you are having trouble opening the documents, you may need to temporarily disable pop-up blockers on your web browser.
The information included in this post is for explanation only and is not intended as tax or legal advice. In all matters where tax or legal advice is needed, the services of professional counsel should be sought.