Tax Filing Information

Sterling HSA does not offer tax advice. However, we do provide our accountholders with quarterly reports on HSA account activity for tax filing purposes. Sterling can reproduce information in the event of an IRS audit. Visit the IRS website or see your tax preparer for the latest tax filing forms you need. Our accountholders will receive two tax forms annually. Form 1099-SA is sent in January and it lists the amount of disbursements recorded for the prior tax year. In May, Form 5498-SA is sent and this form provides information on the deposits to the HSA that were recorded for the previous tax year. Both forms are for information purposes only and are used to help you prepare your tax return.

The law specifies that it is the accountholder's responsibility to determine if disbursements from an HSA are qualified medical expenses. Sterling can help answer questions if you are uncertain about whether a bill will meet IRS requirements. You may also refer to an IRS publication which defines categories of qualified expenses. See http://www.irs.gov/pub/irs-pdf/p502.pdf

We also track deposits and alert accountholders if they are exceeding the maximum allowed by law. HSA contributions are Federally tax-free in all states. Individual state taxes may apply to both employer and employee contributions and interest earned. Consult your tax advisor for additional information and inform your payroll department so that contributions are set up in accordance with your state tax rules as they apply to HSAs.

For more information on HSAs and taxes, visit ustreas.gov or download the Sterling Guide to Tax Related Questions. In addition, the US Treasury and the IRS issued regulations on HSA comparability rules impacting employer contributions to all employees, highly compensated employees and excise tax treatment. For more information on these regulations, visit: ustreas.gov/press/releases/hp32 or download two summary guides from Sterling, Comparable Contributions to HSAs & Excise Tax Return Requirements and Employer Comparable Contributions.