Form 1099-SA Checklist: 2013 Tax Year
HSA, Archer MSA, and Medicare Advantage MSA Distributions
Purpose
Form 1099-SA reports distributions made during the 2013 calendar year from Health Savings Accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Medicare Advantage Medical Savings Accounts (MA MSAs). Trustees and custodians must report gross distributions, earnings on excess contributions, distribution codes, and fair market value on death so recipients can properly determine taxable and nontaxable amounts.
Recipients use Form 1099-SA with Form 8889 (for HSAs) or Form 8853 (for Archer MSAs and MA MSAs) to calculate taxable income, qualified medical expense exclusions, and any additional taxes for 2013.
Filing Steps for 2013
1. Verify the Recipient Identification Number Display
Show only the last four digits of the recipient’s Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Adoption Taxpayer Identification Number (ATIN) on Copy B. Report the full, untruncated identification number on Copy A filed with the Internal Revenue Service, as required by 2013 information return standards.
2. Complete Box 1 – Gross Distribution
Enter the total amount distributed during the 2013 calendar year. This includes payments made directly to medical service providers and distributions paid to the account holder or beneficiary. Do not reduce the amount for qualified medical expenses, and do not include amounts returned to correct mistaken distributions.
3. Complete Box 2 – Earnings on Excess Contributions
If excess contributions to an HSA or Archer MSA were withdrawn by the due date of the 2013 tax return, report only the earnings portion in Box 2. These earnings are taxable income in 2013, even if used for qualified medical expenses. Excess contributions themselves are nontaxable if withdrawn timely.
Calculate earnings using the net income attributable rules under Regulations section 1.408-11.
4. Select Distribution Code (Box 3)
Enter the correct distribution code for 2013:
- Code 1 – Normal distribution
- Code 2 – Excess contributions withdrawn
- Code 3 – Disability distribution
- Code 4 – Death distribution other than Code 6
- Code 5 – Prohibited transaction
- Code 6 – Death distribution after year of death to a nonspouse beneficiary
Only one distribution code applies per Form 1099-SA.
5. Complete Box 4 – Fair Market Value on Date of Death
If the account holder died, enter the fair market value of the account as of the date of death. Estate beneficiaries and nonspouse beneficiaries must generally include this amount in income for the year of death. Spouse beneficiaries apply special rollover and continuation rules under the 2013 instructions for Form 8889 or Form 8853.
6. Identify Account Type (Box 5)
Check the appropriate box to indicate whether the account is an HSA, Archer MSA, or MA MSA. This determines which reporting form the recipient must file with Form 1040.
7. Include Account Number
Enter the account number or other unique identifier assigned by the trustee or custodian. This field helps distinguish multiple accounts for the same recipient and supports IRS matching and reconciliation.
8. Furnish Copy B to the Recipient
Provide Copy B to the recipient by January 31, 2014. Retain Copy C for your records. This statement is required for recipients to accurately prepare Form 8889 or Form 8853 with their 2013 Form 1040.
9. File Copy A with the IRS
File Copy A by February 28, 2014, if filing on paper, or by March 31, 2014, if filing electronically. Paper filings must use official IRS forms that meet scanning requirements. Downloaded or photocopied forms are not acceptable.
10. Complete Form 1096 Transmittal
When filing on paper, include Form 1096, which summarizes the total number of Forms 1099-SA and the total gross distributions reported. File one Form 1096 per form type and do not combine different information returns on a single transmittal.
11. Correct Prior-Year Forms If Needed
If correcting a previously filed 2012 Form 1099-SA, mark the 2013 form as CORRECTED and submit an amended Form 1096. Follow IRS correction procedures to ensure accurate reconciliation.
12. Maintain Supporting Documentation
Retain account statements, distribution authorizations, excess contribution calculations, medical expense records, and death certificates where applicable. Maintain records for at least three years from the filing deadline to support IRS inquiries or recipient disputes.
2013 Year-Specific Updates
Distribution Code Application
Distribution codes in Box 3 distinguish normal distributions, excess contribution withdrawals, disability payments, death-related distributions, prohibited transactions, and post-death nonspouse beneficiary payments. Correct coding ensures income is reported in the correct tax year.
Spouse Beneficiary Rules
When the beneficiary is a surviving spouse, the spouse generally becomes the account holder. HSAs and Archer MSAs may continue as tax-advantaged accounts. MA MSAs inherited by a spouse are treated as Archer MSAs of the spouse for reporting purposes.
Nonspouse Beneficiary Income Recognition
Nonspouse beneficiaries must include the fair market value reported in Box 4 as income for the year of the account holder’s death, even if distributions occur later. This amount may be reduced by qualified medical expenses incurred before death and paid within one year after death. Earnings after death are separately taxable.
Excess Contribution Penalty Tracking
Earnings on excess contributions reported in Box 2 allow recipients to determine whether the 6% excise tax applies. Timely withdrawal of excess contributions and earnings by April 15, 2014, eliminates the excise tax. Uncorrected excess contributions require annual reporting on Form 5329.
Final Note
Recipients should retain Form 1099-SA with their tax records and consult Form 8889, Form 8853, and Publication 969 when preparing their 2013 tax return. Distributions used for qualified medical expenses are generally tax-free, while nonqualified distributions may be subject to income tax and additional penalties.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
