The 1099-SA and 5498-SA are the two halves of a health savings account (HSA) record. The 1099-SA reports money taken out during the year, with a code saying why. The 5498-SA reports money put in, the account's year-end value and any rollovers. Form 8889 brings both together with the W-2's code W.
The 1099-SA and 5498-SA side by side
The 1099-SA and 5498-SA side by side cover opposite directions of the same account. The 1099-SA is money out; the 5498-SA is money in. Both name one calendar year, but the 5498-SA can include deposits made the following spring for that year, so it arrives later.
The IRS Instructions for Forms 1099-SA and 5498-SA (Rev. December 2026) define the boxes. On the 1099-SA, Box 1 is the gross distribution, and the trustee is told to "Include any earnings separately reported in box 2." Box 2 holds earnings distributed with excess contributions. Box 3 is the distribution code. Box 4 is the account's value on the date of death, used only after the holder dies. Box 5 is a checkbox for whether the account is an HSA, an Archer MSA or a Medicare Advantage MSA (MA MSA).
The 5498-SA has six boxes. Box 1 applies only to Archer MSAs. Box 2 is "the total HSA or Archer MSA contributions made in the calendar year." Box 3 is contributions made in the following year for the year on the form. Box 4 is rollover contributions, which "are not to be included in box 2." Box 5 is the account's value on December 31, and Box 6 is the account-type checkbox.
| Form 1099-SA | Form 5498-SA | |
|---|---|---|
| Direction | Money out of the account | Money into the account |
| Key boxes | Box 1 gross distribution, Box 3 code | Box 2 contributions in the year, Box 3 contributions the next spring, Box 4 rollovers |
| Year it covers | Distributions in the calendar year | Contributions received in the calendar year, plus Box 3 |
| Account type | Box 5 checkbox | Box 6 checkbox |
The 5498-SA's later due date explains why it is so often absent when the return is prepared. The instructions say the trustee "must provide a statement to the participant (generally Copy B) by May 31 of the subsequent year." The reason a 5498 arrives after most returns are filed, and how to mark it on a checklist, is covered in 5498 issued after the filing deadline.
Distribution codes in Box 3 of the 1099-SA
Distribution codes in Box 3 of the 1099-SA tell the preparer why money left the HSA. Code 1 covers normal distributions, including payments straight to a doctor or pharmacy. Code 2 is a removal of excess contributions. Codes 3, 4 and 6 cover disability and death. Code 5 is a prohibited transaction.
The instructions word each code this way:
- Code 1, normal distributions: "normal distributions to the account holder and any direct payments to a medical service provider."
- Code 2, excess contributions: "distributions of excess HSA or Archer MSA contributions to the account holder." Earnings on the excess go in Box 2 and are also inside Box 1.
- Code 3, disability: distributions "after the account holder was disabled."
- Code 4, death distribution other than code 6: "payments to a decedent's estate in the year of death," and also payments to an estate after that year.
- Code 5, prohibited transaction: a reference to sections 220(e)(2) and 223(e)(2) of the Internal Revenue Code.
- Code 6, death distribution after year of death to a nonspouse beneficiary: payments to a beneficiary other than an estate.
Code 1 says nothing about whether the money went to medical care. The trustee records that the money left; the instructions say the trustee is "not required to determine the taxable amount of a distribution." Proving the purpose falls to the account holder, which the last section of this post covers.
The code matters on Form 8889 too. The IRS Instructions for Form 8889 (2025) list death, disability and reaching age 65 as the exceptions to the additional 20% tax on line 17b. A code 3 or code 4 is therefore a signal to check the exception box, line 17a, before any additional tax is figured.
Why does the 5498-SA contribution total differ from W-2 Box 12 code W?
The 5498-SA contribution total differs from W-2 Box 12 code W because they count different things. Code W is what went in through the employer, including the employee's own pre-tax payroll deferrals. Box 2 of the 5498-SA is everything the trustee received in the calendar year, from any source, whatever year it was for.
Three items open a gap between the two figures:
- Direct deposits by the client. Money the client sent to the HSA from a bank account is in 5498-SA Box 2 but not in code W.
- Prior-year contributions made in spring. The 5498-SA instructions say Box 2 should "Include any contribution made in the calendar year for the prior year." A deposit in March 2025 designated for 2024 sits in the 2025 Box 2, even though it belongs on the 2024 return.
- Next-spring contributions. A deposit in April 2026 for 2025 appears in Box 3 of the 2025 form, not Box 2.
Form 8889 separates the sources. The 2025 instructions say line 2 includes "only those amounts you, or others on your behalf, contributed to your HSA for 2025," including amounts made by April 15, 2026. They also say payroll contributions through a cafeteria plan "are treated as employer contributions and are not included on line 2." Those go on line 9, which the instructions tie to "Form W-2, box 12, code W." What each Box 12 code means is covered in the W-2 Box 12 codes a preparer sees most.
How do 1099-SA and 5498-SA figures tie to Form 8889?
The 1099-SA and 5498-SA figures tie to Form 8889 in two halves. Contributions come from the 5498-SA and the W-2 and land on lines 2 and 9. Distributions come from 1099-SA Box 1 and land on line 14a. Receipts for qualified medical expenses support line 15, and whatever line 15 cannot cover reaches line 16.
Worked tie-out with fictional figures
The figures below belong to a fictional client, Daniel Example, for tax year 2025, with one HSA at Example Health Bank, account XXXX-4821. They show the arithmetic of matching forms, not a treatment for any real return.
Source documents (examples):
- W-2, Box 12, code W: $2,600.00, made up of payroll deferrals and an employer deposit.
- 5498-SA for 2025, Box 2: $3,800.00. The trustee's history shows $2,600.00 through payroll, $700.00 deposited on March 10, 2025 and designated for 2024, and $500.00 deposited on August 4, 2025 for 2025.
- 5498-SA for 2025, Box 3: $400.00, deposited on April 2, 2026 for 2025.
- 5498-SA for 2025, Box 5: $9,215.00 year-end value.
- 1099-SA for 2025, Box 1: $2,350.00, Box 2 blank, Box 3 code 1, Box 5 HSA checked.
- Pharmacy and clinic receipts the client sent: $2,140.00.
The tie-out:
| Step | Figure | Source |
|---|---|---|
| 5498-SA Box 2 | $3,800.00 | Trustee |
| Less payroll deposits already in code W | ($2,600.00) | W-2 Box 12 |
| Less March deposit designated for 2024 | ($700.00) | Trustee history |
| Direct contributions made in 2025 for 2025 | $500.00 | |
| Add 5498-SA Box 3, made in 2026 for 2025 | $400.00 | Trustee |
| Form 8889, line 2 | $900.00 | |
| Form 8889, line 9 | $2,600.00 | W-2 code W |
| Form 8889, line 14a | $2,350.00 | 1099-SA Box 1 |
| Receipts supporting qualified expenses | $2,140.00 | Client |
| Distribution not matched to a receipt | $210.00 | Question for the client |
The $700.00 March deposit is the item that can end up counted on two returns. It belongs on the 2024 Form 8889, so last year's return should already show it. The $210.00 gap is a request, not a conclusion: the client may have a receipt that never made it into the folder.
Archer MSA and Medicare Advantage MSA accounts on the 1099-SA and 5498-SA
Archer MSA and Medicare Advantage MSA accounts on the 1099-SA and 5498-SA use the same forms as an HSA, with a checkbox saying which account it is. Box 5 on the 1099-SA and Box 6 on the 5498-SA carry that checkbox. An account that is not an HSA does not belong on Form 8889.
IRS Publication 969 (2025) describes a Medicare Advantage MSA as "an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder," and says the account holder "must be enrolled in Medicare." The same publication points Archer MSA reporting to Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, rather than Form 8889.
The 5498-SA has one box that exists only for these accounts. Box 1 reports the employee's or self-employed person's regular Archer MSA contributions. An HSA's 5498-SA leaves it empty. The instructions also say a trustee "may, but you are not required to, report the total MA MSA contributions" in Box 2, so a blank Box 2 on an MA MSA statement is not on its own a sign of a missing deposit.
The practical step is to read the checkbox before anything else. A retiree with Medicare and an older Archer account can hold forms that look identical to an HSA's at a glance. Sorting by account type first keeps an MA MSA distribution off the HSA worksheet.
Assuming every 1099-SA distribution was for medical care
Assuming every 1099-SA distribution was for medical care is a shortcut the forms do not support. The trustee reports only that money left, and code 1 does not prove what it paid for. The account holder needs receipts showing each distribution paid for a qualified medical expense.
Publication 969 sets out the recordkeeping duty. The account holder "must keep records sufficient to show that" the distributions "were exclusively to pay or reimburse qualified medical expenses," that the expenses "hadn't been previously paid or reimbursed from another source," and that they "hadn't been taken as an itemized deduction in any year." Form 8889's line 15 instructions add that expenses must have been incurred after the HSA was established.
A debit card makes the shortcut tempting, because a swipe at a pharmacy looks medical on the statement whatever was in the bag. A reimbursement to the client's checking account leaves no merchant trail at all. Asking for the receipts behind the 1099-SA total, matched to the dates on the trustee's statement, is what turns line 15 from an assumption into a figure the file supports.
The 1099-SA belongs to the 1099 series that Schema CPA reads, together with the W-2 that carries code W, so both land in the client's file and are compared with what arrived last year. The document types Schema CPA reads are listed on the homepage, and firms can get started with up to three clients on the Free plan.
Other forms raise similar matching problems. A family paying tuition gets a statement that rarely equals the bill, covered in 1098-T boxes explained. A client paid through card processors or apps sees gross figures on the 1099-K. For pulling figures from many 1099s at once, see 1099 OCR.