Excited woman at laptop
ComplianceTax & AccountingNovember 23, 2020

HSAs and CESAs: IRS moves to continuous use forms for distribution reporting

Beginning with 2020 Health Savings Account (HSA) and Coverdell Education Savings Account (CESA) distribution reporting you’ll notice the Internal Revenue Service (IRS) has moved to continuous use 1099 forms, essentially excluding the year (i.e., 2020) from the upper right corner of each form. Until a change takes place to either form in a future year the advantage of continuous use forms is that they will likely save data processing and reporting agencies time and effort as they prepare each year to report for the previous year and when making corrections to forms filed in a previous year.

HSA Distribution Reporting

In the “What’s New” section of the 2020 Instructions for Forms 1099-SA and 5498-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA and HSA, Archer MSA, or Medicare Advantage MSA Information, the IRS states the following:

“Continuous-use form and instructions. Form 1099-SA and its instructions, contained herein, have been converted from an annual revision to continuous use. Both the form and instructions will be updated as needed. For the most recent version, go to IRS.gov/Form1099SA”.

CESA Distribution Reporting

In the “Reminders” section of the Instructions for Form 1099-Q (Rev. November 2019), Payments from Qualified Education Programs (Under Sections 529 and 530), the IRS states the following:

“Continuous-use form and instructions. Form 1099-Q and these instructions have been converted from an annual revision to continuous use. Both the form and instructions will be updated as needed. For the most recent version, go to IRS.gov/Form1099Q”.

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider the Wolters Kluwer IRA Library or our on-demand video training offered on a variety of topics. Go here to learn more about training opportunities available to you, or you can call us at 1-800-552-9408.

Mike Schiller
Manager, Specialized Consulting, Tax Advantaged Accounts
With more than 22 years of experience, Mike has worked closely with hundreds of financial organizations to help them create, implement, and maintain their tax-advantaged accounts program.