Which accounts must report distributions on Form 1099-SA?

Form 1099-SA is specifically used to report distributions from Health Savings Accounts (HSA), Archer Medical Savings Accounts (MSA), and Medicare Advantage MSAs. The reporting of these distributions is crucial as it informs the IRS and the account holder of the amounts that were withdrawn for qualified medical expenses or other non-qualified purposes.

Health Savings Accounts are designed to help individuals save for medical expenses while receiving tax advantages. When funds are withdrawn from an HSA, whether for qualified medical expenses or for other uses, it is essential to report those distributions correctly. This ensures compliance with tax laws and helps the taxpayer avoid penalties associated with improper use of the funds.

In contrast, Individual Retirement Accounts (IRAs) and Coverdell Education Savings Accounts (CESAs) each have their own specific reporting requirements and forms, such as Form 1099-R for IRAs, which is used to report distributions from retirement accounts. General savings accounts do not require reporting on Form 1099-SA at all since they are not tax-advantaged accounts linked to medical expenses.