General Questions & Answers
Forms & Descriptions
Tax-subsidized Medical Expenses
State Tax Information


General Questions and Answers

Q: What is the tax treatment of an eligible individual’s HSA contributions?

A: Contributions made by an eligible individual to an HSA are deductible by the eligible individual in determining adjusted gross income (i.e. above the line). The contributions are deductible whether or not the eligible individual itemizes deductions.  However, the individual cannot, at the same time, deduct the contributions as medical expense deductions under section 213.

Q: What is the tax treatment of employer contributions to an employee’s HSA?

A: Employer contributions to eligible individuals HSA’s are treated as employer-provided coverage for medical expenses under an accident or health plan and are excludable from the employee’s gross income. Contributions to an employee’s HSA through a cafeteria plan are treated as employer contributions. The employee cannot deduct employer contributions on his or her federal income tax return as HSA contributions or as medical expense deductions under section 213.

Q: What is the tax treatment of an HSA?

A: An HSA is generally exempt from taxes (like an IRA). Earnings on amounts in the deposit account are not included in gross income as long as they are held in the HSA.

Q: How are distributions from an HSA taxed?

A: Distributions from HSAs used exclusively to pay for qualified medical expenses of the account beneficiary, spouse, or dependents are excludable from gross income. However, any amount of the distribution not used exclusively to pay for qualified medical expenses of the account beneficiary, spouse, or dependents is includable as gross income of the account beneficiary and is subject to an additional 10% tax on the amount of the distribution, except in the case of distributions made after the account beneficiary’s death, disability or attaining age 65.

Q: What is Form 5498-SA?

A: It is a required IRS form that reports the total contributions you made to your HSA in and for the tax year covered by the Form. OptumHealth Bank reports this information directly to the IRS, as required by law. Additional information about the tax treatment of your health savings account (HSA) contributions is available at the IRS website www.IRS.gov or from your tax professional.

Q: Do I need to do anything with the Form when I receive it?

A: You do not need to include a copy of Form 5498-SA with your tax return. However, you should retain it for your records.

Q: What contributions are included in Box 2 of Form 5498-SA?

A: Box 2 shows the total contributions made to your HSA during the tax year covered by the Form. This includes:

• Contributions made for the tax year covered by the Form
• Contributions made between January 1st and April 15th of the tax year covered by the Form that were designated as prior tax year contributions
• Transfers from your IRA to fund your HSA that were made in the tax year covered by the Form

Q: What contributions are included in Box 3 of Form 5498-SA?

A: Box 3 reflects total contributions made in the current year that were for the tax year covered by the Form.

Q: What contributions are included in Box 4 of Form 5498-SA?

A: Box 4 includes:

• Rollovers from another HSA to your HSA that were made in the tax year covered by the Form
• Transfers from an FSA or HRA to your HSA that were made in the tax year covered by the Form

Q: What value is reported in Box 5 of Form 5498-SA?

A: Box 5 shows the fair market value (balance) of your HSA at the end of the tax year covered by the Form.

Q: If I had an excess contribution returned how is that reported?

A: Excess contribution returns do not lower the reported totals on your 5498-SA. They are reflected on a separate 1099-SA for the tax year they are associated with.

Q: What am I required to file with the IRS in connection with my HSA?

A: All HSA contributions must be reported on Form 8889 and filed with your income tax return. You can review your year-do-date contribution amounts on your monthly HSA statement, which is available online.

The above is intended for informational purposes only and should not be construed as offering tax, or legal advice. Contact a tax, legal or accounting professional for personal advice on tax related filings and issues. Federal and State regulations are subject to change.

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