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           Department of the Treasury
           Internal Revenue Service
                                                         Future Developments
                                                         Go  to IRS.gov/Pub969  for  the  latest  information  about 
Publication 969                                          Pub. 969.
Cat. No. 24216S

                                                         What’s New
Health Savings 
                                                         Notice  2023-37 addresses  the  announced  end  of  the 
                                                         COVID-19  public  health  emergency  and  the  National 
Accounts                                                 Emergency  Concerning  the  Novel  Coronavirus  Disease 
                                                         2019  Pandemic  on  May  11,  2023;  it  modifies  prior  guid-
                                                         ance  regarding  benefits  relating  to  testing  for  and  treat-
and Other                                                ment of COVID-19 that can be provided by a health plan 
                                                         that otherwise satisfies the requirements to be a high de-
                                                         ductible health plan (HDHP) under section 223(c)(2)(A) of 
Tax-Favored                                              the Internal Revenue Code (Code). Specifically, the relief 
                                                         described  in  Notice  2020-15,  2020-14  IRB  559,  applies 
                                                         only  with  respect  to  plan  years  ending  on  or  before  De-
Health Plans                                             cember 31, 2024.
                                                         Notice 2023-37 also clarifies whether certain items and 
For use in preparing                                     services  are  treated  as  preventive  care  under  section 
                                                         223(c)(2)(C). Specifically, the preventive care safe harbor 
2023 Returns                                             as described in Notice 2004-23, 2004-15 IRB 725, does 
                                                         not include screening (for example, testing) for COVID-19, 
                                                         effective  as  of  July  24,  2023.  Notice  2023-37  also  pro-
                                                         vides that items and services recommended with an “A” or 
                                                         “B” rating by the United States Preventive Services Task 
                                                         Force on or after March 23, 2010, are treated as preven-
                                                         tive care for purposes of section 223(c)(2)(C), regardless 
                                                         of  whether  these  items  and  services  must  be  covered, 
                                                         without cost sharing, under Public Health Service Act sec-
                                                         tion 2713.
                                                         For  more  information  on  Notice  2023-37,  2023-30 
                                                         I.R.B. 359, see IRS.gov/irb/2023-30_IRB#NOT-2023-37.

                                                         Reminders
                                                         Telehealth  and  other  remote  care  services.                 Public 
                                                         Law 117-328, December 29, 2022, amended section 223 
                                                         to provide that an HDHP may have a $0 deductible for tel-
                                                         ehealth and other remote care services for plan years be-
                                                         ginning before 2022; months beginning after March 2022 
                                                         and before 2023; and plan years beginning after 2022 and 
                                                         before 2025. Also, an “eligible individual” remains eligible 
                                                         to make contributions to its Health Savings Account (HSA) 
                                                         even if the individual has coverage outside of the HDHP 
                                                         during these periods for telehealth and other remote care 
                                                         services.
                                                         Health Flexible Spending Arrangement (FSA) contri-
                                                         bution  and  carryover  for  2023.      Revenue  Procedure 
                                                         2022-38, October 18, 2022, provides that for tax years be-
                                                         ginning in 2023, the dollar limitation under section 125(i) 
                                                         on voluntary employee salary reductions for contributions 
Get forms and other information faster and easier at:    to health flexible spending arrangements is $3,050. If the 
• IRS.gov (English)    • IRS.gov/Korean (한국어)            cafeteria  plan  permits  the  carryover  of  unused  amounts, 
• IRS.gov/Spanish (Español)  • IRS.gov/Russian (Pусский) the maximum carryover amount is $610.
• IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (Tiếng Việt) 

Jan 5, 2024

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Insulin products. Public Law 117-169, August 16, 2022, HRA.
amended section 223 to provide that an HDHP may have
• Over-the-counter medicine (whether or not prescri-
a $0 deductible for selected insulin products. The amend-
bed) and menstrual care products are treated as med-
ment applies to plan years beginning after 2022.
ical care for amounts incurred after 2019.
Health FSA contribution and carryover for 2022. Rev- The IRS will provide any further updates as soon as
enue Procedure 2021-45, November 10, 2021, provides they are available at IRS.gov/Coronavirus.
that for tax years beginning in 2022, the dollar limitation See also Notice 2020-29, 2020-22 I.R.B. 864, and
under section 125(i) on voluntary employee salary reduc- Notice 2020-33, 2020-22 I.R.B. 868, available at
tions for contributions to health flexible spending arrange- IRS.gov/pub/irs-irbs/irb20-22.pdf, for additional
ments is $2,850. If the cafeteria plan permits the carryover information.
of unused amounts, the maximum carryover amount is
$570. Affordable Care Act guidance. Notice 2013-54,
Home testing for COVID-19 and personal protective 2013-40 I.R.B. 287, available at IRS.gov/irb/2013-40_IRB/
equipment for preventing spread of COVID-19. News ar11.html, as supplemented by Notice 2015-87, provides
Release IR-2021-181, September 10, 2021, reminds that guidance for employers on the application of the Afforda-
the cost of home testing for COVID-19 and the costs of ble Care Act (ACA) to FSAs and Health Reimbursement
personal protective equipment, such as masks, hand sani- Arrangements (HRAs).
tizer and sanitizing wipes, for the primary purpose of pre- For more information on the ACA, go to IRS.gov/
venting the spread of COVID-19 are eligible medical ex- Affordable-Care-Act.
penses that can be paid or reimbursed under health Photographs of missing children. The Internal Reve-
FSAs, HSAs, Health Reimbursement Arrangements nue Service is a proud partner with the National Center for
(HRAs), or Archer Medical Savings Accounts (MSAs). Missing & Exploited Children® (NCMEC). Photographs of
Surprise billing for emergency services or air ambu- missing children selected by the Center may appear in
lance services. Public Law 116-260, December 27, this publication on pages that would otherwise be blank.
2020, amended section 223 to provide that an HDHP may You can help bring these children home by looking at the
provide benefits under federal and state anti-“surprise bill- photographs and calling 800-THE-LOST (800-843-5678)
ing” laws with a $0 deductible. Also, an “eligible individual” if you recognize a child.
remains eligible to make contributions to its HSA even if
the individual receives anti-“surprise billing” benefits out-
side of the HDHP. The amendment applies to plan years
beginning after 2021. Introduction
Various programs are designed to give individuals tax ad-
Note. Anti-“surprise billing” laws generally protect indi-
vantages to offset health care costs. This publication ex-
viduals from “surprise billing” for items like emergency
plains the following programs.
medical services, some non-emergency medical services,
and air ambulance services. • Health Savings Accounts (HSAs).
Ask your insurance provider whether your HDHP • Medical Savings Accounts (Archer MSAs and Medi-
care Advantage MSAs).
! and any other coverage meet the requirements of
CAUTION section 223.
• Health Flexible Spending Arrangements (FSAs).
Ask your HSA trustee whether the HSA and • Health Reimbursement Arrangements (HRAs).
! trustee meet the requirements of section 223. An HSA may receive contributions from an eligible indi-
CAUTION
vidual or any other person, including an employer or a
The Coronavirus Aid, Relief, and Economic Security family member, on behalf of an eligible individual. Contri-
Act (CARES Act, P.L. 116-136, March 27, 2020) made the butions, other than employer contributions, are deductible
following changes. on the eligible individual’s return whether or not the indi-
HSA. vidual itemizes deductions. Employer contributions aren’t
included in income. Distributions from an HSA that are
• Over-the-counter medicine (whether or not prescri- used to pay qualified medical expenses aren’t taxed.
bed) and menstrual care products are treated as med- An Archer MSA may receive contributions from an eligi-
ical care for amounts paid after 2019. ble individual and the eligible individual’s employer, but
Archer MSA. not both in the same year. Contributions by the individual
• Over-the-counter medicine (whether or not prescri- are deductible whether or not the individual itemizes de-
bed) and menstrual care products are treated as med- ductions. Employer contributions aren’t included in in-
ical care for amounts paid after 2019. come. Distributions from an Archer MSA that are used to
pay qualified medical expenses aren’t taxed.
Health FSA. A Medicare Advantage MSA is an Archer MSA desig-
• Over-the-counter medicine (whether or not prescri- nated by Medicare to be used solely to pay the qualified
bed) and menstrual care products are treated as med- medical expenses of the account holder who is enrolled in
ical care for amounts incurred after 2019. Medicare. Contributions can be made only by Medicare.

2 Publication 969 (2023)

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The contributions aren’t included in your income. Distribu- Your employer may already have some information on
tions from a Medicare Advantage MSA that are used to HSA trustees in your area.
pay qualified medical expenses aren’t taxed.
If you have an Archer MSA, you can generally roll
A health FSA may receive contributions from an eligible
TIP it over into an HSA tax free. See Rollovers, later.
individual. Employers may also contribute. Contributions
aren’t includible in income. Reimbursements from an FSA
that are used to pay qualified medical expenses aren’t What are the benefits of an HSA? You may enjoy sev-
taxed. eral benefits from having an HSA.
An HRA must receive contributions from the employer
only. Employees may not contribute. Contributions aren’t • You can claim a tax deduction for contributions you, or
includible in income. Reimbursements from an HRA that someone other than your employer, make to your HSA
are used to pay qualified medical expenses aren’t taxed. even if you don’t itemize your deductions on Sched-
ule A (Form 1040).
Comments and suggestions. We welcome your com- Contributions to your HSA made by your employer (in-
•
ments about this publication and suggestions for future cluding contributions made through a cafeteria plan)
editions. may be excluded from your gross income.
You can send us comments through IRS.gov/
FormComments. Or, you can write to the Internal Revenue • The contributions remain in your account until you use
Service, Tax Forms and Publications, 1111 Constitution them.
Ave. NW, IR-6526, Washington, DC 20224. • The interest or other earnings on the assets in the ac-
Although we can’t respond individually to each com- count are tax free.
ment received, we do appreciate your feedback and will
consider your comments and suggestions as we revise • Distributions may be tax free if you pay qualified medi-
our tax forms, instructions, and publications. Don’t send cal expenses. See Qualified medical expenses, later.
tax questions, tax returns, or payments to the above ad- • An HSA is “portable.” It stays with you if you change
dress. employers or leave the work force.
Getting answers to your tax questions. If you have
a tax question not answered by this publication or the How Qualifying for an HSA Contribution
To Get Tax Help section at the end of this publication, go
to the IRS Interactive Tax Assistant page at IRS.gov/ To be an eligible individual and qualify for an HSA contri-
Help/ITA where you can find topics by using the search bution, you must meet the following requirements.
feature or viewing the categories listed. You are covered under a high deductible health plan
•
Getting tax forms, instructions, and publications. (HDHP), described later, on the first day of the month.
Go to IRS.gov/Forms to download current and prior-year • You have no other health coverage except what is per-
forms, instructions, and publications. mitted under Other health coverage, later.
Ordering tax forms, instructions, and publications. • You aren’t enrolled in Medicare.
Go to IRS.gov/OrderForms to order current forms, instruc-
tions, and publications; call 800-829-3676 to order • You can’t be claimed as a dependent on someone
prior-year forms and instructions. The IRS will process else’s 2023 tax return.
your order for forms and publications as soon as possible. Under the last-month rule, you are considered to
Don’t resubmit requests you’ve already sent us. You can TIP be an eligible individual for the entire year if you
get forms and publications faster online. are an eligible individual on the first day of the last
month of your tax year (December 1 for most taxpayers)
and you meet certain other requirements.
Health Savings Accounts
If you meet these requirements, you are an eligible indi-
(HSAs) vidual even if your spouse has non-HDHP family cover-
age, provided your spouse’s coverage doesn’t cover you.
An HSA is a tax-exempt trust or custodial account you set
up with a qualified HSA trustee to pay or reimburse certain Also, you may be an eligible individual even if you re-
medical expenses you incur. You must be an eligible indi- ceive hospital care or medical services under any law ad-
vidual to contribute to an HSA. ministered by the Secretary of Veterans Affairs for a serv-
ice-connected disability.
No permission or authorization from the IRS is neces-
If another taxpayer is entitled to claim you as a de-
sary to establish an HSA. You set up an HSA with a
pendent, you can’t claim a deduction for an HSA
trustee. A qualified HSA trustee can be a bank, an insur- CAUTION!
contribution. This is true even if the other person
ance company, or anyone already approved by the IRS to
doesn’t receive an exemption deduction for you because
be a trustee of individual retirement arrangements (IRAs)
the exemption amount is zero for tax years 2018 through
or Archer MSAs. The HSA can be established through a
2025.
trustee that is different from your health plan provider.

Publication 969 (2023) 3

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Each spouse who is an eligible individual who The following table shows the minimum annual deducti-
TIP wants an HSA must open a separate HSA. You ble and maximum annual deductible and other
can’t have a joint HSA. out-of-pocket expenses for HDHPs for 2023.
Self-only coverage Family coverage
High deductible health plan (HDHP). An HDHP has:
Minimum annual
• A higher annual deductible than typical health plans, deductible $1,500 $3,000
and Maximum annual
• A maximum limit on the sum of the annual deductible deductible and other
out-of-pocket
and out-of-pocket medical expenses that you must expenses* $7,500 $15,000
pay for covered expenses. Out-of-pocket expenses in-
clude copayments and other amounts, but don’t in- * This limit doesn’t apply to deductibles and expenses for out-of-network
clude premiums. services if the plan uses a network of providers. Instead, only deductibles
and out-of-pocket expenses for services within the network should be used
to figure whether the limit applies.
An HDHP may provide preventive care benefits without
a deductible or with a deductible less than the minimum The following table shows the minimum annual
annual deductible. Preventive care includes, but isn’t limi- TIP deductible and maximum annual deductible and
ted to, the following. other out-of-pocket expenses for HDHPs for
2024.
1. Periodic health evaluations, including tests and diag-
nostic procedures ordered in connection with routine Self-only coverage Family coverage
examinations, such as annual physicals.
Minimum annual
2. Routine prenatal and well-child care. deductible $1,600 $3,200
3. Child and adult immunizations. Maximum annual
deductible and other
4. Tobacco cessation programs. out-of-pocket
expenses* $8,050 $16,100
5. Obesity weight-loss programs.
6. Screening services. This includes screening services * This limit doesn’t apply to deductibles and expenses for out-of-network
services if the plan uses a network of providers. Instead, only deductibles
for the following. and out-of-pocket expenses for services within the network should be used
a. Cancer. to figure whether the limit applies.
Self-only HDHP coverage is HDHP coverage for only
b. Heart and vascular diseases.
an eligible individual. Family HDHP coverage is HDHP
c. Infectious diseases. coverage for an eligible individual and at least one other
d. Mental health conditions. individual (whether or not that individual is an eligible indi-
vidual).
e. Substance abuse.
Example. You, an eligible individual, and your de-
f. Metabolic, nutritional, and endocrine conditions. pendent child are covered under an “employee plus one”
g. Musculoskeletal disorders. HDHP offered by your employer. This is family HDHP cov-
erage.
h. Obstetric and gynecological conditions.
Family plans that don’t meet the high deductible
i. Pediatric conditions.
rules. There are some family plans that have deductibles
j. Vision and hearing disorders. for both the family as a whole and for individual family
members. Under these plans, if you meet the individual
For more information on screening services, see
deductible for one family member, you don’t have to meet
Notice 2004-23, 2004-15 I.R.B. 725, available at
the higher annual deductible amount for the family. If ei-
IRS.gov/irb/2004-15_IRB#NOT-2004-23.
ther the deductible for the family as a whole or the deduc-
For additional guidance on preventive care, see
tible for an individual family member is less than the mini-
Notice 2004-50, 2004-2 C.B. 196, Q&A 26 and 27,
mum annual deductible for family coverage, the plan
available at IRS.gov/irb/2004-33_IRB#NOT-2004-50;
doesn’t qualify as an HDHP.
and Notice 2013-57, 2013-40 I.R.B. 293, available at
IRS.gov/pub/irs-drop/n-13-57.pdf. Preventive care Other health coverage. If you (and your spouse, if
can also include coverage for treatment of individuals you have family coverage) have HDHP coverage, you
with certain chronic conditions listed in the Appendix can’t generally have any other health coverage. However,
of Notice 2019-45, 2019-32 I.R.B. 593, if such serv- you can still be an eligible individual even if your spouse
ices were received or items were incurred on or after has non-HDHP coverage, provided you aren’t covered by
July 17, 2019. For information on preventive care for that plan.
chronic conditions, see Notice 2019-45, 2019-32
I.R.B. 593, available at IRS.gov/pub/irs-drop/
n-19-45.pdf.

4 Publication 969 (2023)

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You can have additional insurance that provides bene- doesn’t have to be the same as the deductible for the
fits only for the following items. HDHP, but benefits may not be provided before the
minimum annual deductible amount is met.
• Liabilities incurred under workers’ compensation laws,
tort liabilities, or liabilities related to ownership or use • Retirement HRA. This arrangement pays or reimbur-
of property. ses only those medical expenses incurred after retire-
ment. After retirement, you are no longer eligible to
• A specific disease or illness.
make contributions to an HSA.
• A fixed amount per day (or other period) of hospitaliza-
tion. Health FSA—grace period. Coverage during a grace
period by a general purpose health FSA is allowed if the
You can also have coverage (whether provided through balance in the health FSA at the end of its prior year plan
insurance or otherwise) for the following items. is zero. See Flexible Spending Arrangements (FSAs),
• Accidents. later.
• Disability.
Contributions to an HSA
• Dental care.
• Vision care. Any eligible individual can contribute to an HSA. For an
employee’s HSA, the employee, the employee’s employer,
• Long-term care. or both may contribute to the employee’s HSA in the same
• Telehealth and other remote care. year. For an HSA established by a self-employed (or un-
employed) individual, the individual can contribute. Family
Plans in which substantially all of the coverage is members or any other person may also make contribu-
! through the items listed earlier aren’t HDHPs. For tions on behalf of an eligible individual.
CAUTION example, if your plan provides coverage substan-
tially all of which is for a specific disease or illness, the Contributions to an HSA must be made in cash. Contri-
plan isn’t an HDHP for purposes of establishing an HSA. butions of stock or property aren’t allowed.

Prescription drug plans. You can have a prescrip- Limit on Contributions
tion drug plan, either as part of your HDHP or a separate
plan (or rider), and qualify as an eligible individual if the The amount you or any other person can contribute to
plan doesn’t provide benefits until the minimum annual de- your HSA depends on the type of HDHP coverage you
ductible of the HDHP has been met. If you can receive have, your age, the date you become an eligible individ-
benefits before that deductible is met, you aren’t an eligi- ual, and the date you cease to be an eligible individual.
ble individual. For 2023, if you have self-only HDHP coverage, you can
contribute up to $3,850. If you have family HDHP cover-
Other employee health plans. An employee cov- age, you can contribute up to $7,750.
ered by an HDHP and a health FSA or an HRA that pays
or reimburses qualified medical expenses can’t generally For 2024, if you have self-only HDHP coverage,
make contributions to an HSA. FSAs and HRAs are dis- TIP you can contribute up to $4,150. If you have family
cussed later. HDHP coverage, you can contribute up to $8,300.
However, an employee can make contributions to an
HSA while covered under an HDHP and one or more of If you are, or were considered (under the last-month
the following arrangements. rule, discussed later), an eligible individual for the entire
• Limited-purpose health FSA or HRA. These arrange- year and didn’t change your type of coverage, you can
ments can pay or reimburse the items listed earlier un- contribute the full amount based on your type of coverage.
der Other health coverage except long-term care. However, if you weren’t an eligible individual for the entire
Also, these arrangements can pay or reimburse pre- year or changed your coverage during the year, your con-
ventive care expenses because they can be paid with- tribution limit is the greater of:
out having to satisfy the deductible. 1. The limitation shown on the Line 3 Limitation Chart
• Suspended HRA. Before the beginning of an HRA and Worksheet in the Instructions for Form 8889,
coverage period, you can elect to suspend the HRA. Health Savings Accounts (HSAs); or
The HRA doesn’t pay or reimburse, at any time, the 2. The maximum annual HSA contribution based on
medical expenses incurred during the suspension pe- your HDHP coverage (self-only or family) on the first
riod except preventive care and items listed under day of the last month of your tax year.
Other health coverage, earlier. When the suspension
period ends, you are no longer eligible to make contri- If you had family HDHP coverage on the first day
butions to an HSA. TIP of the last month of your tax year, your contribu-
tion limit for 2023 is $7,750 even if you changed
• Post-deductible health FSA or HRA. These arrange- coverage during the year.
ments don’t pay or reimburse any medical expenses
incurred before the minimum annual deductible
amount is met. The deductible for these arrangements

Publication 969 (2023) 5

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Last-month rule.           Under the last-month rule, if you are an  You fail to be an eligible individual in March 2024. Be-
eligible individual on the first day of the last month of your       cause  you  didn’t  remain  an  eligible  individual  during  the 
tax year (December 1 for most taxpayers), you are consid-            testing period (December 1, 2023, through December 31, 
ered an eligible individual for the entire year. You are trea-       2024), you must include in income the contribution made 
ted as having the same HDHP coverage for the entire year             that  wouldn’t  have  been  made  except  for  the  last-month 
as you had on the first day of the last month if you didn’t          rule. You use the worksheet in the Form 8889 instructions 
otherwise have coverage.                                             to determine this amount.
  Testing  period.           If  contributions  were  made  to  your 
HSA based on you being an eligible individual for the en-            January. . . . . . . . . . . . . . . .     $3,850.00
                                                                     February . . . . . . . . . . . . . . . .   $3,850.00
tire year under the last-month rule, you must remain an eli-
                                                                     March. . . . . . . . . . . . . . . . . .   $3,850.00
gible  individual  during  the  testing  period.  For  the 
                                                                     April. . . . . . . . . . . . . . . . . . . $3,850.00
last-month  rule,  the  testing  period  begins  with  the  last 
                                                                     May. . . . . . . . . . . . . . . . . . .   $3,850.00
month  of  your  tax  year  and  ends  on  the  last  day  of  the 
                                                                     June. . . . . . . . . . . . . . . . . .    $3,850.00
                                                                     July
12th month following that month (for example, December                   . . . . . . . . . . . . . . . . . . .  $3,850.00
1, 2023, through December 31, 2024).                                        . . . . . . . . . . . . . . . . .   $3,850.00
                                                                     August
  If you fail to remain an eligible individual during the test-      September. . . . . . . . . . . . . .       $3,850.00
ing period, for reasons other than death or becoming disa-           October  . . . . . . . . . . . . . . . .   $3,850.00
bled, you will have to include in income the total contribu-         November   . . . . . . . . . . . . . . .   $7,750.00
tions  made  to  your  HSA  that  wouldn’t  have  been  made         December. . . . . . . . . . . . . . .      $7,750.00
except for the last-month rule. You include this amount in           Total for all months. . . . . . . .        $54,000.00
your income in the year in which you fail to be an eligible          Limitation. Divide the total by 12         $4,500.00
individual. This amount is also subject to a 10% additional 
tax. The income and additional tax are calculated on Form            You would include $3,250.00 ($7,750.00 − $4,500.00) in 
8889, Part III.                                                      your gross income on your 2024 tax return. Also, a 10% 
                                                                     additional tax applies to this amount.
  Example 1.           You, age 53, become an eligible individ-
ual on December 1, 2023. You have family HDHP cover-                 Additional contribution.                 If you are an eligible individual 
age on that date. Under the last-month rule, you contribute          who is age 55 or older at the end of your tax year, your 
$7,750 to your HSA.                                                  contribution  limit  is  increased  by  $1,000.  For  example,  if 
  You  fail  to  be  an  eligible  individual  in  June  2024.  Be-  you  have  self-only  coverage,  you  can  contribute  up  to 
cause  you  didn’t  remain  an  eligible  individual  during  the    $4,850  (the  contribution  limit  for  self-only  coverage 
testing period (December 1, 2023, through December 31,               ($3,850) plus the additional contribution of $1,000). How-
2024), you must include in your 2024 income the contribu-            ever, see Enrolled in Medicare, later.
tions made in 2023 that wouldn’t have been made except 
for the last-month rule. You use the worksheet in the Form                    If you have more than one HSA in 2023, your total 
8889 instructions to determine this amount.                          !        contributions to all the HSAs can’t be more than 
                                                                     CAUTION  the limits discussed earlier.
January. . . . . . . . . . . . . . . .     -0-
February . . . . . . . . . . . . . . . .   -0-                       Reduction of contribution limit.           You must reduce the 
March. . . . . . . . . . . . . . . . . .   -0-                       amount that can be contributed (including any additional 
April. . . . . . . . . . . . . . . . . . . -0-                       contribution) to your HSA by the amount of any contribu-
May. . . . . . . . . . . . . . . . . . .   -0-                       tion made to your Archer MSA (including employer contri-
June. . . . . . . . . . . . . . . . . .    -0-                       butions) for the year. A special rule applies to married peo-
July. . . . . . . . . . . . . . . . . . .  -0-                       ple,  discussed  next,  if  each  spouse  has  family  coverage 
August . . . . . . . . . . . . . . . . .   -0-                       under an HDHP.
September. . . . . . . . . . . . . .       -0-
October  . . . . . . . . . . . . . . . .   -0-                       Rules for married people.                  If either spouse has family 
November   . . . . . . . . . . . . . . .   -0-                       HDHP coverage, both spouses are treated as having fam-
December. . . . . . . . . . . . . . .      $7,750.00                 ily  HDHP  coverage.  If  each  spouse  has  family  coverage 
Total for all months. . . . . . . .        $7,750.00                 under  a  separate  plan,  the  contribution  limit  for  2023  is 
Limitation. Divide the total by 12         $645.83                   $7,750. You must reduce the limit on contributions, before 
                                                                     taking  into  account  any  additional  contributions,  by  the 
You  would  include  $7,104.17  ($7,750.00  −  $645.83)  in          amount contributed to both spouses’ Archer MSAs. After 
your gross income on your 2024 tax return. Also, a 10%               that  reduction,  the  contribution  limit  is  split  equally  be-
additional tax applies to this amount.                               tween  the  spouses  unless  you  agree  on  a  different  divi-
                                                                     sion.
  Example 2.           You, age 39, have self-only HDHP cover-
age on January 1, 2023. You change to family HDHP cov-                        The  rules  for  married  people  apply  only  if  both 
erage  on  November  1,  2023.  Because  you  have  family           !        spouses are eligible individuals.
                                                                     CAUTION
HDHP  coverage  on  December  1,  2023,  you  contribute 
$7,750 for 2023.

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If both spouses are 55 or older and not enrolled in Med- Example. In 2023, you are an eligible individual, age
icare, each spouse’s contribution limit is increased by the 57, with self-only HDHP coverage. You can make a quali-
additional contribution. If both spouses meet the age re- fied HSA funding distribution of $4,850 ($3,850 plus
quirement, the total contributions under family coverage $1,000 additional contribution).
can’t be more than $9,750. Each spouse must make the
Funding distribution—testing period. You must re-
additional contribution to its own HSA.
main an eligible individual during the testing period. For a
Example. For 2023, you and your spouse are both eli- qualified HSA funding distribution, the testing period be-
gible individuals. You each have family coverage under gins with the month in which the qualified HSA funding
separate HDHPs. You are 58 years old and your spouse is distribution is contributed and ends on the last day of the
53. You and your spouse can split the family contribution 12th month following that month. For example, if a quali-
limit ($7,750) equally or you can agree on a different divi- fied HSA funding distribution is contributed to your HSA
sion. If you split it equally, you can contribute $4,875 to an on August 10, 2023, your testing period begins in August
HSA (one-half the maximum contribution for family cover- 2023, and ends on August 31, 2024.
age ($3,875) + $1,000 additional contribution) and your If you fail to remain an eligible individual during the test-
spouse can contribute $3,875 to an HSA. ing period, for reasons other than death or becoming disa-
bled, you will have to include in income the qualified HSA
Employer contributions. You must reduce the funding distribution. You include this amount in income in
amount you, or any other person, can contribute to your the year in which you fail to be an eligible individual. This
HSA by the amount of any contributions made by your em- amount is also subject to a 10% additional tax. The in-
ployer that are excludable from your income. This includes come and the additional tax are calculated on Form 8889,
amounts contributed to your account by your employer Part III.
through a cafeteria plan. Each qualified HSA funding distribution allowed has its
Enrolled in Medicare. Beginning with the first month own testing period. For example, you are an eligible indi-
you are enrolled in Medicare, your contribution limit is vidual, age 45, with self-only HDHP coverage. On June
zero. This rule applies to periods of retroactive Medicare 18, 2023, you make a qualified HSA funding distribution.
coverage. So, if you delayed applying for Medicare and On July 27, 2023, you enroll in family HDHP coverage and
later your enrollment is backdated, any contributions to on August 17, 2023, you make a qualified HSA funding
your HSA made during the period of retroactive coverage distribution. Your testing period for the first distribution be-
are considered excess. See Excess contributions, later. gins in June 2023 and ends on June 30, 2024. Your test-
ing period for the second distribution begins in August
Example. You turned age 65 in July 2023 and enrol- 2023 and ends on August 31, 2024.
led in Medicare. You had an HDHP with self-only coverage The testing period rule that applies under the
and are eligible for an additional contribution of $1,000. last-month rule (discussed earlier) doesn’t apply to
Your contribution limit is $2,425 ($4,850 × 6 ÷ 12). amounts contributed to an HSA through a qualified HSA
funding distribution. If you remain an eligible individual
Qualified HSA funding distribution. A qualified HSA during the entire funding distribution testing period, then
funding distribution may be made from your traditional IRA no amount of that distribution is included in income and
or Roth IRA to your HSA. This distribution can’t be made won’t be subject to the additional tax for failing to meet the
from an ongoing SEP IRA or SIMPLE IRA. For this pur- last-month rule testing period.
pose, a SEP IRA or SIMPLE IRA is ongoing if an employer
contribution is made for the plan year ending with or within
the tax year in which the distribution would be made. Rollovers
The maximum qualified HSA funding distribution de-
pends on the HDHP coverage (self-only or family) you A rollover contribution isn’t included in your income, isn’t
have on the first day of the month in which the contribution deductible, and doesn’t reduce your contribution limit.

is made and your age as of the end of the tax year. The Archer MSAs and other HSAs. You can roll over
distribution must be made directly by the trustee of the amounts from Archer MSAs and other HSAs into an HSA.
IRA to the trustee of the HSA. The distribution isn’t inclu- You don’t have to be an eligible individual to make a roll-
ded in your income, isn’t deductible, and reduces the over contribution from your existing HSA to a new HSA.
amount that can be contributed to your HSA. The qualified Rollover contributions don’t need to be in cash. Rollovers
HSA funding distribution is shown on Form 8889 for the aren’t subject to the annual contribution limits.
year in which the distribution is made. You must roll over the amount within 60 days after the
You can generally make only one qualified HSA funding date of receipt. You can make only one rollover contribu-
distribution during your lifetime. However, if you make a tion to an HSA during a 1-year period.
distribution during a month when you have self-only HDHP
coverage, you can make another qualified HSA funding Note. If you instruct the trustee of your HSA to transfer
distribution in a later month in that tax year if you change funds directly to the trustee of another of your HSAs, the
to family HDHP coverage. The total qualified HSA funding transfer isn’t considered a rollover. There is no limit on the
distribution can’t be more than the contribution limit for number of these transfers. Don’t include the amount trans-
family HDHP coverage plus any additional contribution to ferred in income, deduct it as a contribution, or include it
which you are entitled. as a distribution on Form 8889.

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When To Contribute contribution isn’t included in box 1 of Form W-2, you must
report the excess as “Other income” on your tax return.
You can make contributions to your HSA for 2023 through Generally, you must pay a 6% excise tax on excess
April 15, 2024. If you fail to be an eligible individual during contributions. See Form 5329, Additional Taxes on Quali-
2023, you can still make contributions through April 15, fied Plans (Including IRAs) and Other Tax-Favored Ac-
2024, for the months you were an eligible individual. counts, to figure the excise tax. The excise tax applies to
each tax year the excess contribution remains in the ac-
Your employer can make contributions to your HSA count.
from January 1, 2024, through April 15, 2024, that are al- You may withdraw some or all of the excess contribu-
located to 2023. Your employer must notify you and the tions and avoid paying the excise tax on the amount with-
trustee of your HSA that the contribution is for 2023. The drawn if you meet the following conditions.
contribution will be reported on your 2024 Form W-2, • You withdraw the excess contributions by the due
Wage and Tax Statement. date, including extensions, of your tax return for the
year the contributions were made.
Reporting Contributions on Your Return
• You withdraw any income earned on the withdrawn
contributions and include the earnings in “Other in-
Contributions made by your employer aren’t included in
come” on your tax return for the year you withdraw the
your income. Contributions to an employee’s account by
contributions and earnings.
an employer using the amount of an employee’s salary re-
duction through a cafeteria plan are treated as employer If you fail to remain an eligible individual during
contributions. Generally, you can claim contributions you ! any of the testing periods, discussed earlier, the
made and contributions made by any other person, other CAUTION amount you have to include in income isn’t an ex-
than your employer, on your behalf, as a deduction. cess contribution. If you withdraw any of those amounts,
the amount is treated the same as any other distribution
Contributions by a partnership to a bona fide partner’s from an HSA, discussed later.
HSA aren’t contributions by an employer. The contribu-
tions are treated as a distribution of money and aren’t in- Deducting an excess contribution in a later year. You
cluded in the partner’s gross income. Contributions by a may be able to deduct excess contributions for previous
partnership to a partner’s HSA for services rendered are years that are still in your HSA. The excess contribution
treated as guaranteed payments that are deductible by you can deduct for the current year is the lesser of the fol-
the partnership and includible in the partner’s gross in- lowing two amounts.
come. In both situations, the partner can deduct the contri-
• Your maximum HSA contribution limit for the year mi-
bution made to the partner’s HSA.
nus any amounts contributed to your HSA for the year.
Contributions by an S corporation to a 2% share- • The total excess contributions in your HSA at the be-
holder-employee’s HSA for services rendered are treated ginning of the year.
as guaranteed payments and are deductible by the S cor- Amounts contributed for the year include contributions
poration and includible in the shareholder-employee’s by you, your employer, and any other person. They also
gross income. The shareholder-employee can deduct the include any qualified HSA funding distribution made to
contribution made to the shareholder-employee’s HSA. your HSA. Any excess contribution remaining at the end of
a tax year is subject to the excise tax. See Form 5329.
Form 8889. Report all contributions to your HSA on
Form 8889 and file it with your Form 1040, 1040-SR, or
1040-NR. You should include all contributions made for Distributions From an HSA
2023, including those made from January 1, 2024,
You will generally pay medical expenses during the year
through April 15, 2024, that are designated for 2023. Con-
without being reimbursed by your HDHP until you reach
tributions made by your employer and qualified HSA fund-
the annual deductible for the plan. When you pay medical
ing distributions are also shown on the form.
expenses during the year that aren’t reimbursed by your
You should receive Form 5498-SA, HSA, Archer MSA,
HDHP, you can ask the trustee of your HSA to send you a
or Medicare Advantage MSA Information, from the trustee
distribution from your HSA.
showing the amount contributed to your HSA during the
year. Your employer’s contributions will also be shown on You can receive tax-free distributions from your HSA to
Form W-2, box 12, code W. Follow the Instructions for pay or be reimbursed for qualified medical expenses you
Form 8889. Report your HSA deduction on Form 1040, incur after you establish the HSA. If you receive distribu-
1040-SR, or 1040-NR. tions for other reasons, the amount you withdraw will be
subject to income tax and may be subject to an additional
Excess contributions. You will have excess contribu- 20% tax. You don’t have to make withdrawals from your
tions if the contributions to your HSA for the year are HSA each year.
greater than the limits discussed earlier. Excess contribu-
tions aren’t deductible. Excess contributions made by your
employer are included in your gross income. If the excess

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If you are no longer an eligible individual, you can 2. Health care continuation coverage (such as coverage
TIP still receive tax-free distributions to pay or reim- under COBRA).
burse your qualified medical expenses.
3. Health care coverage while receiving unemployment
Generally, a distribution is money you get from your compensation under federal or state law.
HSA. Your total distributions include amounts paid with a 4. Medicare and other health care coverage if you were
debit card and amounts withdrawn from the HSA by other 65 or older (other than premiums for a Medicare sup-
individuals that you have designated. The trustee will re- plemental policy, such as Medigap).
port any distribution to you and the IRS on Form 1099-SA,
Distributions From an HSA, Archer MSA, or Medicare Ad- The premiums for long-term care insurance (item (1))
vantage MSA. that you can treat as qualified medical expenses are sub-
ject to limits based on age and are adjusted annually. See
Qualified medical expenses. Qualified medical expen- Limit on long-term care premiums you can deduct in the
ses are those expenses that would generally qualify for Instructions for Schedule A (Form 1040).
the medical and dental expenses deduction. These are Items (2) and (3) can be for your spouse or a depend-
explained in Pub. 502, Medical and Dental Expenses. ent meeting the requirement for that type of coverage. For
Amounts paid after 2019 for over-the-counter medicine item (4), if you, the account beneficiary, aren’t 65 or older,
(whether or not prescribed) and menstrual care products Medicare premiums for coverage of your spouse or a de-
are considered medical care and are considered a cov- pendent (who is 65 or older) aren’t generally qualified
ered expense. medical expenses.
For HSA purposes, expenses incurred before you es- Health coverage tax credit. You can’t claim this
tablish your HSA aren’t qualified medical expenses. State credit for premiums that you pay with a tax-free distribution
law determines when an HSA is established. An HSA that from your HSA. See Pub. 502 for more information on this
is funded by amounts rolled over from an Archer MSA or credit.
another HSA is established on the date the prior account
was established. Deemed distributions from HSAs. The following situa-
If, under the last-month rule, you are considered to be tions result in deemed taxable distributions from your
an eligible individual for the entire year for determining the HSA.
contribution amount, only those expenses incurred after
you actually establish your HSA are qualified medical ex- • You engaged in any transaction prohibited by section
penses. 4975 with respect to any of your HSAs at any time in
Qualified medical expenses are those incurred by the 2023. Your account ceases to be an HSA as of Janu-
following persons. ary 1, 2023, and you must include the fair market
value of all assets in the account as of January 1,
1. You and your spouse. 2023, on Form 8889.
2. All dependents you claim on your tax return. • You used any portion of any of your HSAs as security
for a loan at any time in 2023. You must include the fair
3. Any person you could have claimed as a dependent
market value of the assets used as security for the
on your return except that:
loan as income on Form 1040, 1040-SR, or 1040-NR.
a. The person filed a joint return; Examples of prohibited transactions include the direct
b. The person had gross income of $4,700 or more; or indirect:
or • Sale, exchange, or leasing of property between you
c. You, or your spouse if filing jointly, could be and the HSA;
claimed as a dependent on someone else’s 2023 • Lending of money between you and the HSA;
return.
• Furnishing goods, services, or facilities between you
For this purpose, a child of parents that are di- and the HSA; and
TIP vorced, separated, or living apart for the last 6
months of the calendar year is treated as the de- • Transfer to or use by you, or for your benefit, of any as-
pendent of both parents whether or not the custodial pa- sets of the HSA.
rent releases the claim to the child’s exemption. Any deemed distributions won’t be treated as used to
pay qualified medical expenses. These distributions are
You can’t deduct qualified medical expenses as included in your income and are subject to the additional
! an itemized deduction on Schedule A (Form 20% tax, discussed later.
CAUTION 1040) that are equal to the tax-free distribution
from your HSA.

Insurance premiums. You can’t treat insurance pre-
miums as qualified medical expenses unless the premi-
ums are for any of the following.
1. Long-term care insurance.

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Recordkeeping. You must keep records suffi- Death of HSA Holder
cient to show that:
RECORDS
You should choose a beneficiary when you set up your
• The distributions were exclusively to pay or reimburse HSA. What happens to that HSA when you die depends
qualified medical expenses, on whom you designate as the beneficiary.
• The qualified medical expenses hadn’t been previ-
ously paid or reimbursed from another source, and Spouse is the designated beneficiary. If your spouse
is the designated beneficiary of your HSA, it will be treated
• The medical expenses hadn’t been taken as an item- as your spouse’s HSA after your death.
ized deduction in any year.
Don’t send these records with your tax return. Keep them Spouse isn’t the designated beneficiary. If your
with your tax records. spouse isn’t the designated beneficiary of your HSA:
• The account stops being an HSA, and
Reporting Distributions on Your Return • The fair market value of the HSA becomes taxable to
the beneficiary in the year in which you die.
How you report your distributions depends on whether or
If your estate is the beneficiary, the value is included on
not you use the distribution for qualified medical expenses
your final income tax return. The amount taxable to a ben-
(defined earlier).
eficiary other than the estate is reduced by any qualified
• If you use a distribution from your HSA for qualified medical expenses for the decedent that are paid by the
medical expenses, you don’t pay tax on the distribu- beneficiary within 1 year after the date of death.
tion but you have to report the distribution on Form
8889. However, the distribution of an excess contribu- Filing Form 8889
tion taken out after the due date, including extensions,
of your return is subject to tax even if used for qualified You must file Form 8889 with your Form 1040, 1040-SR,
medical expenses. Follow the instructions for the form or 1040-NR if you (or your spouse, if married filing jointly)
and file it with your Form 1040, 1040-SR, or 1040-NR. had any activity in your HSA during the year. You must file
• If you don’t use a distribution from your HSA for quali- the form even if only your employer or your spouse’s em-
fied medical expenses, you must pay tax on the distri- ployer made contributions to the HSA.
bution. Report the amount on Form 8889 and file it
with your Form 1040, 1040-SR, or 1040-NR. You may If, during the tax year, you are the beneficiary of two or
have to pay an additional 20% tax on your taxable dis- more HSAs or you are a beneficiary of an HSA and you
tribution. have your own HSA, you must complete a separate Form
8889 for each HSA. Enter “statement” at the top of each
HSA administration and maintenance fees with- Form 8889 and complete the form as instructed. Next,
TIP drawn by the trustee aren’t reported as distribu- complete a controlling Form 8889 combining the amounts
tions from the HSA. shown on each of the statement Forms 8889. Attach the
statements to your tax return after the controlling Form
Additional tax. There is an additional 20% tax on the 8889.
part of your distributions not used for qualified medical ex-
penses. Figure the tax on Form 8889 and file it with your
Employer Participation
Form 1040, 1040-SR, or 1040-NR.
Exceptions. There is no additional tax on distribu- This section contains the rules that employers must follow
tions made after the date you are disabled, reach age 65, if they decide to make HSAs available to their employees.
or die. Unlike the previous discussions, “you” refers to the em-
ployer and not to the employee.

Balance in an HSA Health plan. If you want your employees to be able to
An HSA is generally exempt from tax. You are permitted to have HSAs, they must have an HDHP. You can provide no
take a distribution from your HSA at any time; however, additional coverage other than those exceptions listed
only those amounts used exclusively to pay for qualified earlier under Other health coverage.

medical expenses are tax free. Amounts that remain at the Contributions. You can make contributions to your em-
end of the year are generally carried over to the next year ployees’ HSAs. You deduct the contributions on your busi-
(see Excess contributions, earlier). Earnings on amounts ness income tax return for the year in which you make the
in an HSA aren’t included in your income while held in the contributions. If the contribution is allocated to the prior
HSA. year, you still deduct it in the year in which you made the
contribution.
For more information on employer contributions, see
Notice 2008-59, 2008-29 I.R.B. 123, questions 23 through
27, available at IRS.gov/irb/2008-29_IRB/ar11.html.

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Comparable contributions. If you decide to make con- medical care costs of the account holder, the account
tributions, you must make comparable contributions to all holder’s spouse, or the account holder’s dependent(s).
comparable participating employees’ HSAs. Your contri-
After 2007, you can’t be treated as an eligible indi-
butions are comparable if they are either:
vidual for Archer MSA purposes unless:
• The same amount, or CAUTION!
• The same percentage of the annual deductible limit 1. You were an active participant for any tax year ending
under the HDHP covering the employees. before 2008, or
The comparability rules don’t apply to contributions made 2. You became an active participant for a tax year ending
through a cafeteria plan. after 2007 by reason of coverage under a high deduc-
tible health plan (HDHP) of an Archer MSA participat-
Comparable participating employees. Comparable ing employer.
participating employees:

• Are covered by your HDHP and are eligible to estab- A Medicare Advantage MSA is an Archer MSA desig-
lish an HSA, nated by Medicare to be used solely to pay the qualified
• Have the same category of coverage (either self-only medical expenses of the account holder who is eligible for
or family coverage), and Medicare.
• Have the same category of employment (part-time,
full-time, or former employees). Archer MSAs

To meet the comparability requirements for eligible em- An Archer MSA is a tax-exempt trust or custodial account
ployees who have neither established an HSA by Decem- that you set up with a U.S. financial institution (such as a
ber 31 nor notified you that they have an HSA, you must bank or an insurance company) in which you can save
meet a notice requirement and a contribution requirement. money exclusively for future medical expenses.
You will meet the notice requirement if by January 15 of
the following calendar year you provide a written notice to What are the benefits of an Archer MSA? You may
all such employees. The notice must state that each eligi- enjoy several benefits from having an Archer MSA.
ble employee who, by the last day of February, establishes
an HSA and notifies you that the eligible employee has es- • You can claim a tax deduction for contributions you
make even if you don’t itemize your deductions on
tablished an HSA will receive a comparable contribution to
Schedule A (Form 1040) or Schedule A (Form
the HSA for the prior year. For a sample of the notice, see
1040-NR).
Regulations section 54.4980G-4 A-14(c). You will meet
the contribution requirement for these employees if by • The interest or other earnings on the assets in your
April 15, 2024, you contribute comparable amounts plus Archer MSA are tax free.
reasonable interest to the employees’ HSAs for the prior Distributions may be tax free if you pay qualified medi-
•
year. cal expenses. See Qualified medical expenses, later.
Note. For purposes of making contributions to HSAs • The contributions remain in your Archer MSA from
of non-highly compensated employees, highly compensa- year to year until you use them.
ted employees may not be treated as comparable partici-
pating employees. • An Archer MSA is “portable,” so it stays with you if you
change employers or leave the work force.
Excise tax. If you made contributions to your employees’
HSAs that weren’t comparable, you must pay an excise Qualifying for an Archer MSA
tax of 35% of the amount you contributed.
To qualify for an Archer MSA, you must be either of the fol-
Employment taxes. Amounts you contribute to your em- lowing.
ployees’ HSAs aren’t generally subject to employment • An employee (or the spouse of an employee) of a
taxes. You must report the contributions in box 12 of the small employer (defined later) that maintains a
Form W-2 you file for each employee. This includes the self-only or family HDHP for you (or your spouse).
amounts the employee elected to contribute through a caf-
eteria plan. Enter code W in box 12. • A self-employed person (or the spouse of a self-em-
ployed person) who maintains a self-only or family
HDHP.
Medical Savings Accounts You can have no other health or Medicare coverage ex-
cept what is permitted under Other health coverage, later.
(MSAs) You must be an eligible individual on the first day of a
given month to get an Archer MSA deduction for that
Archer MSAs were created to help self-employed individu- month.
als and employees of certain small employers meet the

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If another taxpayer is entitled to claim you as a de- the higher annual deductible amount for the family. If ei-
! pendent, you can’t claim a deduction for an ther the deductible for the family as a whole or the deduc-
CAUTION Archer MSA contribution. This is true even if the tible for an individual family member is less than the mini-
other person doesn’t receive an exemption deduction for mum annual deductible for family coverage, the plan
you because the exemption amount is zero for tax years doesn’t qualify as an HDHP.
2018 through 2025.
Other health coverage. If you (and your spouse, if you
have family coverage) have HDHP coverage, you can’t
Small employer. A small employer is generally an em-
generally have any other health coverage. However, you
ployer who had an average of 50 or fewer employees dur-
can still be an eligible individual even if your spouse has
ing either of the last 2 calendar years. The definition of
non-HDHP coverage, provided you aren’t covered by that
small employer is modified for new employers and grow-
plan. However, you can have additional insurance that
ing employers.
provides benefits only for the following items.
Growing employer. A small employer may begin
• Liabilities incurred under workers’ compensation laws,
HDHPs and Archer MSAs for its employees and then grow
torts, or ownership or use of property.
beyond 50 employees. The employer will continue to meet
the requirement for small employers if the employer: • A specific disease or illness.
• Had 50 or fewer employees when the Archer MSAs • A fixed amount per day (or other period) of hospitaliza-
began, tion.
• Made a contribution that was excludable or deductible You can also have coverage (whether provided through in-
as an Archer MSA for the last year the employer had surance or otherwise) for the following items.
50 or fewer employees, and • Accidents.
• Had an average of 200 or fewer employees each year • Disability.
after 1996.
• Dental care.
Changing employers. If you change employers, your • Vision care.
Archer MSA moves with you. However, you may not make
• Long-term care.
additional contributions unless you are otherwise eligible.

High deductible health plan (HDHP). To be eligible to Contributions to an MSA
contribute to an Archer MSA, you must be covered under
an HDHP. An HDHP has: Contributions to an Archer MSA must be made in cash.
You can’t contribute stock or other property to an Archer
• A higher annual deductible than typical health plans, MSA.
and
• A maximum limit on the annual out-of-pocket medical Who can contribute to my Archer MSA? If you are an
expenses that you must pay for covered expenses. employee, your employer may make contributions to your
Archer MSA. (You don’t pay tax on these contributions.) If
Limits. The following table shows the limits for annual your employer doesn’t make contributions to your Archer
deductibles and the maximum out-of-pocket expenses for MSA, or you are self-employed, you can make your own
HDHPs for 2023. contributions to your Archer MSA. You and your employer
can’t make contributions to your Archer MSA in the same
year. You don’t have to make contributions to your Archer
Self-only coverage Family coverage MSA every year.
Minimum annual
deductible $2,650 $5,300 If your spouse is covered by your HDHP and an
excludable amount is contributed by your spou-
Maximum annual CAUTION! se’s employer to an Archer MSA belonging to your
deductible $3,950 $7,900
spouse, you can’t make contributions to your own Archer
Maximum annual MSA that year.
out-of-pocket
expenses $5,300 $9,650
Limits
Family plans that don’t meet the high deductible
rules. There are some family plans that have deductibles There are two limits on the amount you or your employer
for both the family as a whole and for individual family can contribute to your Archer MSA.
members. Under these plans, if you meet the individual The annual deductible limit.
•
deductible for one family member, you don’t have to meet
• An income limit.

Annual deductible limit. You or your employer can con-
tribute up to 75% of the annual deductible of your HDHP
(65% if you have a self-only plan) to your Archer MSA. You

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must have the HDHP all year to contribute the full amount. made for 2023, including those made from January 1,
If you don’t qualify to contribute the full amount for the 2024, through April 15, 2024, that are designated for
year, determine your annual deductible limit by using the 2023.
Line 3 Limitation Chart and Worksheet in the Instructions
for Form 8853, Archer MSAs and Long-Term Care Insur- You should receive Form 5498-SA, HSA, Archer MSA,
ance Contracts. or Medicare Advantage MSA Information, from the trustee
showing the amount you or your employer contributed dur-
Example 1. You have an HDHP for your family all year ing the year. Your employer’s contributions should be
in 2023. The annual deductible is $6,000. You can contrib- shown on Form W-2, box 12, code R. Follow the Instruc-
ute up to $4,500 ($6,000 × 75% (0.75)) to your Archer tions for Form 8853 and complete the Line 3 Limitation
MSA for the year. Chart and Worksheet in the instructions. Report your
Archer MSA deduction on Form 1040, 1040-SR, or
Example 2. You have an HDHP for your family for the
1040-NR.
entire period of July through December 2023 (6 months).
The annual deductible is $6,000. You can contribute up to Excess contributions. You will have excess contribu-
$2,250 ($6,000 × 75% (0.75) ÷ 12 × 6) to your Archer tions if the contributions to your Archer MSA for the year
MSA for the year. are greater than the limits discussed earlier. Excess con-
If you and your spouse each have a family plan, tributions aren’t deductible. Excess contributions made by
TIP you are treated as having family coverage with the your employer are included in your gross income. If the ex-
lower annual deductible of the two health plans. cess contribution isn’t included in Form W-2, box 1, you
The contribution limit is split equally between the two of must report the excess as “Other income” on your tax re-
you unless you agree on a different division. turn.
Generally, you must pay a 6% excise tax on excess
Income limit. You can’t contribute more than you earned contributions. See Form 5329, Additional Taxes on Quali-
for the year from the employer through whom you have fied Plans (Including IRAs) and Other Tax-Favored Ac-
your HDHP. counts, to figure the excise tax. The excise tax applies to
If you are self-employed, you can’t contribute more than each tax year the excess contribution remains in the ac-
your net self-employment income. This is your income count.
from self-employment minus expenses (including the de- You may withdraw some or all of the excess contribu-
ductible part of self-employment tax). tions and avoid paying the excise tax on the amount with-
drawn if you meet the following conditions.
Example 1. You earned $25,000 from TR Company in • You withdraw the excess contributions by the due
2023. Through TR, you had an HDHP for your family for date, including extensions, of your tax return.
the entire year. The annual deductible was $6,000. You
can contribute up to $4,500 to your Archer MSA (75% • You withdraw any income earned on the withdrawn
(0.75) × $6,000). You can contribute the full amount be- contributions and include the earnings in “Other in-
cause you earned more than $4,500 at TR. come” on your tax return for the year you withdraw the
contributions and earnings.
Example 2. You are self-employed. You had an HDHP
for your family for the entire year in 2023. The annual de- Deducting an excess contribution in a later year. You
ductible was $6,000. Based on the annual deductible, the may be able to deduct excess contributions for previous
maximum contribution to your Archer MSA would have years that are still in your Archer MSA. The excess contri-
been $4,500 (75% (0.75) × $6,000). However, after de- bution you can deduct in the current year is the lesser of
ducting your business expenses, your net self-employ- the following two amounts.
ment income is $2,500 for the year. Therefore, you are • Your maximum Archer MSA contribution limit for the
limited to a contribution of $2,500. year minus any amounts contributed to your Archer
MSA for the year.
Individuals enrolled in Medicare. Beginning with the
first month you are enrolled in Medicare, you can’t contrib- • The total excess contributions in your Archer MSA at
ute to an Archer MSA. However, you may be eligible for a the beginning of the year.
Medicare Advantage MSA, discussed later. Any excess contributions remaining at the end of a tax
year are subject to the excise tax. See Form 5329.
When To Contribute
Distributions From an MSA
You can make contributions to your Archer MSA for 2023
through April 15, 2024.
You will generally pay medical expenses during the year
without being reimbursed by your HDHP until you reach
Reporting Contributions on Your Return the annual deductible for the plan. When you pay medical
expenses during the year that aren’t reimbursed by your
Report all contributions to your Archer MSA on Form 8853
HDHP, you can ask the trustee of your Archer MSA to
and file it with your Form 1040, 1040-SR, or 1040-NR. You
send you a distribution from your Archer MSA.
should include all contributions you or your employer

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You can receive tax-free distributions from your Archer Deemed distributions from Archer MSAs. The follow-
MSA to pay for qualified medical expenses (discussed ing situations result in deemed taxable distributions from
later). If you receive distributions for other reasons, the your Archer MSA.
amount will be subject to income tax and may be subject
• You engaged in any transaction prohibited by section
to an additional 20% tax as well. You don’t have to make
4975 with respect to any of your Archer MSAs at any
withdrawals from your Archer MSA each year.
time in 2023. Your account ceases to be an Archer
If you no longer qualify to make contributions, you MSA as of January 1, 2023, and you must include the
TIP can still receive tax-free distributions to pay or re- fair market value of all assets in the account as of Jan-
imburse your qualified medical expenses. uary 1, 2023, on Form 8853.
• You used any portion of any of your Archer MSAs as
A distribution is money you get from your Archer MSA. security for a loan at any time in 2023. You must in-
The trustee will report any distribution to you and the IRS clude the fair market value of the assets used as se-
on Form 1099-SA, Distributions From an HSA, Archer curity for the loan as income on Form 1040, 1040-SR,
MSA, or Medicare Advantage MSA. or 1040-NR.
Qualified medical expenses. Qualified medical expen- Examples of prohibited transactions include the direct
ses are those expenses that would generally qualify for or indirect:
the medical and dental expenses deduction. These are • Sale, exchange, or leasing of property between you
explained in Pub. 502. and the Archer MSA;
Amounts paid after 2019 for over-the-counter medicine
(whether or not prescribed) and menstrual care products • Lending of money between you and the Archer MSA;
are considered medical care and are considered a cov- • Furnishing goods, services, or facilities between you
ered expense. and the Archer MSA; and
Qualified medical expenses are those incurred by the
following persons. • Transfer to or use by you, or for your benefit, of any as-
sets of the Archer MSA.
1. You and your spouse. Any deemed distribution won’t be treated as used to
2. All dependents you claim on your tax return. pay qualified medical expenses. These distributions are
included in your income and are subject to the additional
3. Any person you could have claimed as a dependent 20% tax, discussed later.
on your return except that:
Recordkeeping. You must keep records suffi-
a. The person filed a joint return; cient to show that:
RECORDS
b. The person had gross income of $4,700 or more;
or • The distributions were exclusively to pay or reimburse
qualified medical expenses,
c. You, or your spouse if filing jointly, could be
claimed as a dependent on someone else’s 2023 • The qualified medical expenses hadn’t been previ-
return. ously paid or reimbursed from another source, and
For this purpose, a child of parents that are di- • The medical expenses hadn’t been taken as an item-
TIP vorced, separated, or living apart for the last 6 ized deduction in any year.
months of the calendar year is treated as the de- Don’t send these records with your tax return. Keep them
pendent of both parents whether or not the custodial pa- with your tax records.
rent releases the claim to the child’s exemption.
You can’t deduct qualified medical expenses as Reporting Distributions on Your Return

! an itemized deduction on Schedule A (Form How you report your distributions depends on whether or
CAUTION 1040) that are equal to the tax-free distribution
from your Archer MSA. not you use the distribution for qualified medical expen-
ses, defined earlier.
Special rules for insurance premiums. Generally, • If you use a distribution from your Archer MSA for
you can’t treat insurance premiums as qualified medical qualified medical expenses, you don’t pay tax on the
expenses for Archer MSAs. You can, however, treat premi- distribution but you have to report the distribution on
ums for long-term care coverage, health care coverage Form 8853. Follow the instructions for the form and file
while you receive unemployment benefits, or health care it with your Form 1040, 1040-SR, or 1040-NR.
continuation coverage required under any federal law as
qualified medical expenses for Archer MSAs. • If you don’t use a distribution from your Archer MSA
for qualified medical expenses, you must pay tax on
Health coverage tax credit. You can’t claim this the distribution. Report the amount on Form 8853 and
credit for premiums that you pay with a tax-free distribution file it with your Form 1040, 1040-SR, or 1040-NR. You
from your Archer MSA. See Pub. 502 for information on may have to pay an additional 20% tax, discussed
this credit. later, on your taxable distribution.

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If an amount (other than a rollover) is contributed Filing Form 8853
! to your Archer MSA this year (by you or your em-
CAUTION ployer), you must also report and pay tax on a dis- You must file Form 8853 with your Form 1040, 1040-SR,
tribution you receive from your Archer MSA this year that or 1040-NR if you (or your spouse, if married filing a joint
is used to pay medical expenses of someone who isn’t return) had any activity in your Archer MSA during the
covered by an HDHP, or is also covered by another health year. You must file the form even if only your employer or
plan that isn’t an HDHP, at the time the expenses are in- your spouse’s employer made contributions to the Archer
curred. MSA.
If, during the tax year, you are the beneficiary of two or
Rollovers. Generally, any distribution from an Archer
more Archer MSAs or you are a beneficiary of an Archer
MSA that you roll over into another Archer MSA or an HSA
MSA and you have your own Archer MSA, you must com-
isn’t taxable if you complete the rollover within 60 days. An
plete a separate Form 8853 for each MSA. Enter “state-
Archer MSA and an HSA can receive only one rollover
ment” at the top of each Form 8853 and complete the form
contribution during a 1-year period. See the Form 8853 in-
as instructed. Next, complete a controlling Form 8853
structions for more information.
combining the amounts shown on each of the statement
Additional tax. There is a 20% additional tax on the part Forms 8853. Attach the statements to your tax return after
of your distributions not used for qualified medical expen- the controlling Form 8853.
ses. Figure the tax on Form 8853 and file it with your Form
1040, 1040-SR, or 1040-NR. Report the additional tax in Employer Participation
the total on Form 1040, 1040-SR, or 1040-NR.
This section contains the rules that employers must follow
Exceptions. There is no additional tax on distribu-
if they decide to make Archer MSAs available to their em-
tions made after the date you are disabled, reach age 65,
ployees. Unlike the previous discussions, “you” refers to
or die.
the employer and not to the employee.

Balance in an Archer MSA Health plan. If you want your employees to be able to
have Archer MSAs, you must make an HDHP available to
An Archer MSA is generally exempt from tax. You are per- them. You can provide no additional coverage other than
mitted to take a distribution from your Archer MSA at any those exceptions listed earlier under Other health cover-
time; however, only those amounts used exclusively to pay age.
for qualified medical expenses are tax free. Amounts that
remain at the end of the year are generally carried over to Contributions. You can make contributions to your em-
the next year (see Excess contributions, earlier). Earnings ployees’ Archer MSAs and deduct them for the year in
on amounts in an Archer MSA aren’t included in your in- which you make them.
come while held in the Archer MSA.
Comparable contributions. If you decide to make con-
tributions, you must make comparable contributions to all
Death of the Archer MSA Holder comparable participating employees’ Archer MSAs. Your
contributions are comparable if they are either:
You should choose a beneficiary when you set up your
Archer MSA. What happens to that Archer MSA when you • The same amount, or
die depends on whom you designate as the beneficiary. • The same percentage of the annual deductible limit
under the HDHP covering the employees.
Spouse is the designated beneficiary. If your spouse
is the designated beneficiary of your Archer MSA, it will be Comparable participating employees. Comparable
treated as your spouse’s Archer MSA after your death. participating employees:
Spouse isn’t the designated beneficiary. If your • Are covered by your HDHP and are eligible to estab-
spouse isn’t the designated beneficiary of your Archer lish an Archer MSA,
MSA: • Have the same category of coverage (either self-only
• The account stops being an Archer MSA, and or family coverage), and
• The fair market value of the Archer MSA becomes tax- • Have the same category of employment (either
able to the beneficiary in the year in which you die. part-time or full-time).

If your estate is the beneficiary, the fair market value of Excise tax. If you made contributions to your employees’
the Archer MSA will be included on your final income tax Archer MSAs that weren’t comparable, you must pay an
return. excise tax of 35% of the amount you contributed.
The amount taxable to a beneficiary other than
Employment taxes. Amounts you contribute to your em-
TIP the estate is reduced by any qualified medical ex- ployees’ Archer MSAs aren’t generally subject to employ-
penses for the decedent that are paid by the ben-
ment taxes. You must report the contributions on Form
eficiary within 1 year after the date of death.
W-2, box 12, code R.

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Medicare Advantage MSAs Qualifying for an FSA

A Medicare Advantage MSA is an Archer MSA designated Health FSAs are employer-established benefit plans.
by Medicare to be used solely to pay the qualified medical These may be offered in conjunction with other em-
expenses of the account holder. To be eligible for a Medi- ployer-provided benefits as part of a cafeteria plan. Em-
care Advantage MSA, you must be enrolled in Medicare ployers have flexibility to offer various combinations of
and have an HDHP that meets the Medicare guidelines. benefits in designing their plans.
A Medicare Advantage MSA is a tax-exempt trust or
Self-employed persons aren’t eligible for FSAs.
custodial savings account that you set up with a financial
institution (such as a bank or an insurance company) in Certain limitations may apply if you are a highly
which the Medicare program can deposit money for quali- ! compensated participant or a key employee.
fied medical expenses. The money in your account isn’t CAUTION
taxed if it is used for qualified medical expenses, and it
may earn interest or dividends. Contributions to an FSA
An HDHP is a special health insurance policy that has a
high deductible. You choose the policy you want to use as You contribute to your FSA by electing an amount to be
part of your Medicare Advantage MSA plan. However, the voluntarily withheld from your pay by your employer. This
policy must be approved by the Medicare program. is sometimes called a “salary reduction agreement.” The
employer may also contribute to your FSA if specified in
Medicare Advantage MSAs are administered through the plan.
the federal Medicare program. You can get information by
calling 800-MEDICARE (800-633-4227) or through the In- You don’t pay federal income tax or employment taxes
ternet at Medicare.gov. on the salary you contribute or the amounts your employer
contributes to the FSA. However, contributions made by
Note. You must file Form 8853, Archer MSAs and your employer to provide coverage for long-term care in-
Long-Term Care Insurance Contracts, with your tax return surance must be included in income.
if you have a Medicare Advantage MSA.
When To Contribute

Flexible Spending At the beginning of the plan year, you must designate how
much you want to contribute. Then, your employer will de-
Arrangements (FSAs) duct amounts periodically (generally, every payday) in ac-
cordance with your annual election. You can change or re-
A health FSA allows employees to be reimbursed for med- voke your election only if specifically allowed by law and
ical expenses. FSAs are usually funded through voluntary the plan.
salary reduction agreements with your employer. No em-
ployment or federal income taxes are deducted from your Amount of Contribution
contribution. The employer may also contribute.
Note. Unlike HSAs or Archer MSAs, which must be For 2023, salary reduction contributions to a health FSA
reported on Form 1040, 1040-SR, or 1040-NR, there are can’t be more than $3,050 a year (or any lower amount set
no reporting requirements for FSAs on your income tax re- by the plan). This amount is indexed for inflation and may
turn. change from year to year.

For information on the interaction between a health Generally, contributed amounts that aren’t spent by the
FSA and an HSA, see Other employee health plans under end of the plan year are forfeited. However, see Balance in
Qualifying for an HSA, earlier. an FSA, later, for possible exceptions. For this reason, it is
important to base your contribution on an estimate of the
What are the benefits of an FSA? You may enjoy sev- qualifying expenses you will have during the year.
eral benefits from having an FSA.
• Contributions made by your employer can be exclu- Distributions From an FSA
ded from your gross income.
• No employment or federal income taxes are deducted Generally, distributions from a health FSA must be paid
from the contributions. only to reimburse you for qualified medical expenses you
incurred during the period of coverage. You must be able
• Reimbursements may be tax free if you pay qualified
to receive the maximum amount of reimbursement (the
medical expenses. See Qualified medical expenses,
amount you have elected to contribute for the year) at any
later.
time during the coverage period, regardless of the amount
• You can use an FSA to pay qualified medical expen- you have actually contributed. The maximum amount you
ses even if you haven’t yet placed the funds in the ac- can receive tax free is the total amount you elected to con-
count. tribute to the health FSA for the year.

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You must provide the health FSA with a written state- Qualified reservist distribution. A special rule allows
ment from an independent third party stating that the med- amounts in a health FSA to be distributed to reservists or-
ical expense has been incurred and the amount of the ex- dered or called to active duty. This rule applies to distribu-
pense. You must also provide a written statement that the tions made after June 17, 2008, if the plan has been
expense hasn’t been paid or reimbursed under any other amended to allow these distributions. Your employer must
health plan coverage. The FSA can’t make advance reim- report the distribution as wages on your Form W-2 for the
bursements of future or projected expenses. year in which the distribution is made. The distribution is
subject to employment taxes and is included in your gross
Debit cards, credit cards, and stored value cards given
income.
to you by your employer can be used to reimburse partici-
A qualified reservist distribution is allowed if you were
pants in a health FSA. If the use of these cards meets cer-
(because you were in the reserves) ordered or called to
tain substantiation methods, you may not have to provide
active duty for a period of more than 179 days or for an in-
additional information to the health FSA. For information
definite period, and the distribution is made during the pe-
on these methods, see Revenue Ruling 2003-43, 2003-21
riod beginning on the date of the order or call and ending
I.R.B. 935, available at IRS.gov/pub/irs-drop/rr-03-43.pdf;
on the last date that reimbursements could otherwise be
Notice 2006-69, 2006-31 I.R.B. 107, available at
made for the plan year that includes the date of the order
IRS.gov/irb/2006-31_IRB/ar10.html; and Notice 2007-2,
or call.
2007-2 I.R.B. 254, available at IRS.gov/irb/2007-02_IRB/
ar09.html.
Balance in an FSA
Qualified medical expenses. Qualified medical expen-
ses are those specified in the plan that would generally FSAs are generally "use-it-or-lose-it" plans. This means
qualify for the medical and dental expenses deduction. that amounts in the account at the end of the plan year
These are explained in Pub. 502. can't generally be carried over to the next year. However,
Expenses incurred after December 31, 2019, for the plan can provide for either a grace period or a carry-
over-the-counter medicine (whether or not prescribed) over.
and menstrual care products are considered medical care The plan can provide for a grace period of up to 2 1/2
and are considered a covered expense. months after the end of the plan year. If there is a grace
Qualified medical expenses are those incurred by the period, any qualified medical expenses incurred in that
following persons. period can be paid from any amounts left in the account at
1. You and your spouse. the end of the previous year. Your employer isn't permitted
to refund any part of the balance to you. See Qualified re-
2. All dependents you claim on your tax return. servist distributions, earlier.
3. Any person you could have claimed as a dependent Plans may allow up to $610 of unused amounts remain-
on your return except that: ing at the end of the plan year to be paid or reimbursed for
a. The person filed a joint return; qualified medical expenses you incur in the following plan
year. The plan may specify a lower dollar amount as the
b. The person had gross income of $4,700 or more; maximum carryover amount. If the plan permits a carry-
or over, any unused amounts in excess of the carryover
c. You, or your spouse if filing jointly, could be amount are forfeited. The carryover doesn't affect the
claimed as a dependent on someone else’s 2023 maximum amount of salary reduction contributions that
return. you are permitted to make.
4. Your child under age 27 at the end of your tax year. A plan may allow either the grace period or a carryover,
but it may not allow both.
You can’t receive distributions from your FSA for the fol-
lowing expenses.
Employer Participation
• Amounts paid for health insurance premiums.
For the health FSA to maintain tax-qualified status, em-
• Amounts paid for long-term care coverage or expen-
ployers must comply with certain requirements that apply
ses.
to cafeteria plans. For example, there are restrictions for
• Amounts that are covered under another health plan. plans that cover highly compensated employees and key
If you are covered under both a health FSA and an HRA, employees. The plans must also comply with rules appli-
see Notice 2002-45, Part V, 2002-28 I.R.B. 93, available at cable to other accident and health plans. Pub. 15-B, Em-
IRS.gov/pub/irs-drop/n-02-45.pdf. ployer’s Tax Guide to Fringe Benefits, explains these re-
quirements.
You can’t deduct qualified medical expenses as
! an itemized deduction on Schedule A (Form
CAUTION 1040) that are equal to the reimbursement you re-
ceive from the FSA.

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Distributions From an HRA
Health Reimbursement
Generally, distributions from an HRA must be paid to reim-
Arrangements (HRAs) burse you for qualified medical expenses you have incur-
red. The expense must have been incurred on or after the
An HRA must be funded solely by an employer. The con- date you are enrolled in the HRA.
tribution can’t be paid through a voluntary salary reduction Debit cards, credit cards, and stored value cards given
agreement on the part of an employee. Employees are re- to you by your employer can be used to reimburse partici-
imbursed tax free for qualified medical expenses up to a pants in an HRA. If the use of these cards meets certain
maximum dollar amount for a coverage period. An HRA substantiation methods, you may not have to provide addi-
may be offered with other health plans, including FSAs. tional information to the HRA. For information on these
Note. Unlike HSAs or Archer MSAs, which must be methods, see Revenue Ruling 2003-43, 2003-21 I.R.B.
reported on Form 1040, 1040-SR, or 1040-NR, there are 935, available at IRS.gov/pub/irs-drop/rr-03-43.pdf; Notice
no reporting requirements for HRAs on your income tax 2006-69, 2006-31 I.R.B. 107, available at IRS.gov/irb/
return. 2006-31_IRB/ar10.html; and Notice 2007-2, 2007-2 I.R.B.
254, available at IRS.gov/irb/2007-02_IRB/ar09.html.
For information on the interaction between an HRA and
an HSA, see Other employee health plans under Qualify- If any distribution is, or can be, made for other than the
ing for an HSA, earlier. reimbursement of qualified medical expenses, any distri-
bution (including reimbursement of qualified medical ex-
What are the benefits of an HRA? You may enjoy sev- penses) made in the current tax year is included in gross
eral benefits from having an HRA. income. For example, if an unused reimbursement is pay-
able to you in cash at the end of the year, or upon termina-
• Contributions made by your employer can be exclu- tion of your employment, any distribution from the HRA is
ded from your gross income. included in your income. This also applies if any unused
• Reimbursements may be tax free if you pay qualified amount upon your death is payable in cash to your benefi-
medical expenses. See Qualified medical expenses, ciary or estate, or if the HRA provides an option for you to
later. transfer any unused reimbursement at the end of the year
to a retirement plan.
• Any unused amounts in the HRA can be carried for-
ward for reimbursements in later years. If the plan permits amounts to be paid as medical bene-
fits to a designated beneficiary (other than the employee’s
Qualifying for an HRA spouse or dependents), any distribution from the HRA is
included in income.
HRAs are employer-established benefit plans. These may
Reimbursements under an HRA can be made to the fol-
be offered in conjunction with other employer-provided
lowing persons.
health benefits. Employers have complete flexibility to of-
fer various combinations of benefits in designing their 1. Current and former employees.
plans.
2. Spouses and dependents of those employees.
Self-employed persons aren’t eligible for HRAs.
3. Any person you could have claimed as a dependent
Certain limitations may apply if you are a highly on your return except that:
! compensated participant. a. The person filed a joint return;
CAUTION
b. The person had gross income of $4,700 or more;
Contributions to an HRA or
c. You, or your spouse if filing jointly, could be
HRAs are funded solely through employer contributions claimed as a dependent on someone else’s 2023
and may not be funded through employee salary reduc- return.
tions under a cafeteria plan. These contributions aren’t in-
cluded in the employee’s income. You don’t pay federal in- 4. Your child under age 27 at the end of your tax year.
come tax or employment taxes on amounts your employer 5. Spouses and dependents of deceased employees.
contributes to the HRA.
For this purpose, a child of parents that are di-
Amount of Contribution TIP vorced, separated, or living apart for the last 6
months of the calendar year is treated as the de-
There is no limit on the amount of money your employer pendent of both parents whether or not the custodial pa-
can contribute to the accounts. Additionally, the maximum rent releases the claim to the child’s exemption.
reimbursement amount credited under the HRA in the fu-
ture may be increased or decreased by amounts not previ- Qualified medical expenses. Qualified medical expen-
ously used. See Balance in an HRA, later. ses are those specified in the plan that would generally

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qualify for the medical and dental expenses deduction. Free options for tax preparation. Your options for pre-
These are explained in Pub. 502. paring and filing your return online or in your local com-
Expenses incurred after December 31, 2019, for munity, if you qualify, include the following.
over-the-counter medicine (whether or nor prescribed)
• Free File. This program lets you prepare and file your
and menstrual care products are considered medical care
federal individual income tax return for free using soft-
and are considered a covered expense.
ware or Free File Fillable Forms. However, state tax
Qualified medical expenses from your HRA include the
preparation may not be available through Free File. Go
following.
to IRS.gov/FreeFile to see if you qualify for free online
• Amounts paid for health insurance premiums. federal tax preparation, e-filing, and direct deposit or
payment options.
• Amounts paid for long-term care coverage.
• Amounts that aren’t covered under another health • VITA. The Volunteer Income Tax Assistance (VITA)
program offers free tax help to people with
plan.
low-to-moderate incomes, persons with disabilities,
If you are covered under both an HRA and a health FSA, and limited-English-speaking taxpayers who need
see Notice 2002-45, Part V, which is available at help preparing their own tax returns. Go to IRS.gov/
IRS.gov/pub/irs-drop/n-02-45.pdf. VITA, download the free IRS2Go app, or call
You can’t deduct qualified medical expenses as 800-906-9887 for information on free tax return prepa-
ration.
! an itemized deduction on Schedule A (Form
CAUTION 1040) that are equal to the distribution from the
• TCE. The Tax Counseling for the Elderly (TCE) pro-
HRA. gram offers free tax help for all taxpayers, particularly
those who are 60 years of age and older. TCE volun-
teers specialize in answering questions about pen-
Balance in an HRA sions and retirement-related issues unique to seniors.
Some, but not all, HRAs permit amounts that remain at the Go to IRS.gov/TCE or download the free IRS2Go app
end of the year to be carried to the next year. Your em- for information on free tax return preparation.
ployer isn’t permitted to refund any part of the balance to • MilTax. Members of the U.S. Armed Forces and quali-
you. These amounts may never be used for anything but fied veterans may use MilTax, a free tax service of-
reimbursements for qualified medical expenses. fered by the Department of Defense through Military
OneSource. For more information, go to
Employer Participation MilitaryOneSource MilitaryOneSource.mil/MilTax ( ).
Also, the IRS offers Free Fillable Forms, which can
For an HRA to maintain tax-qualified status, employers be completed online and then e-filed regardless of in-
must comply with certain requirements that apply to other come.
accident and health plans. Pub. 15-B, Employer’s Tax
Guide to Fringe Benefits, explains these requirements. Using online tools to help prepare your return. Go to
IRS.gov/Tools for the following.
• The Earned Income Tax Credit Assistant IRS.gov/ (
How To Get Tax Help EITCAssistant) determines if you’re eligible for the
earned income credit (EIC).
If you have questions about a tax issue; need help prepar- • The Online EIN Application IRS.gov/EIN ( ) helps you
ing your tax return; or want to download free publications, get an employer identification number (EIN) at no
forms, or instructions, go to IRS.gov to find resources that cost.
can help you right away.
• The Tax Withholding Estimator IRS.gov/W4App ( )
Preparing and filing your tax return. After receiving all makes it easier for you to estimate the federal income
your wage and earnings statements (Forms W-2, W-2G, tax you want your employer to withhold from your pay-
1099-R, 1099-MISC, 1099-NEC, etc.); unemployment check. This is tax withholding. See how your withhold-
compensation statements (by mail or in a digital format) or ing affects your refund, take-home pay, or tax due.
other government payment statements (Form 1099-G); • The First-Time Homebuyer Credit Account Look-up
and interest, dividend, and retirement statements from (IRS.gov/HomeBuyer) tool provides information on
banks and investment firms (Forms 1099), you have sev- your repayments and account balance.
eral options to choose from to prepare and file your tax re-
turn. You can prepare the tax return yourself, see if you • The Sales Tax Deduction Calculator IRS.gov/ (
qualify for free tax preparation, or hire a tax professional to SalesTax) figures the amount you can claim if you
prepare your return. itemize deductions on Schedule A (Form 1040).
Getting answers to your tax questions. On
IRS.gov, you can get up-to-date information on
current events and changes in tax law.

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Watching IRS videos. The IRS Video portal
• IRS.gov/Help: A variety of tools to help you get an-
(IRSVideos.gov) contains video and audio presentations
swers to some of the most common tax questions.
for individuals, small businesses, and tax professionals.
• IRS.gov/ITA: The Interactive Tax Assistant, a tool that
will ask you questions and, based on your input, pro- Online tax information in other languages. You can
vide answers on a number of tax topics. find information on IRS.gov/MyLanguage if English isn’t
your native language.
• IRS.gov/Forms: Find forms, instructions, and publica-
tions. You will find details on the most recent tax Free Over-the-Phone Interpreter (OPI) Service. The
changes and interactive links to help you find answers IRS is committed to serving taxpayers with limited-English
to your questions. proficiency (LEP) by offering OPI services. The OPI Serv-
• You may also be able to access tax information in your ice is a federally funded program and is available at Tax-
e-filing software. payer Assistance Centers (TACs), most IRS offices, and
every VITA/TCE tax return site. The OPI Service is acces-
sible in more than 350 languages.
Need someone to prepare your tax return? There are
various types of tax return preparers, including enrolled Accessibility Helpline available for taxpayers with
agents, certified public accountants (CPAs), accountants, disabilities. Taxpayers who need information about ac-
and many others who don’t have professional credentials. cessibility services can call 833-690-0598. The Accessi-
If you choose to have someone prepare your tax return, bility Helpline can answer questions related to current and
choose that preparer wisely. A paid tax preparer is: future accessibility products and services available in al-
• Primarily responsible for the overall substantive accu- ternative media formats (for example, braille, large print,
racy of your return, audio, etc.). The Accessibility Helpline does not have ac-
cess to your IRS account. For help with tax law, refunds, or
• Required to sign the return, and account-related issues, go to IRS.gov/LetUsHelp.
• Required to include their preparer tax identification
Note. Form 9000, Alternative Media Preference, or
number (PTIN).
Form 9000(SP) allows you to elect to receive certain types
Although the tax preparer always signs the return, of written correspondence in the following formats.
! you're ultimately responsible for providing all the • Standard Print.
CAUTION information required for the preparer to accurately
prepare your return and for the accuracy of every item re- • Large Print.
ported on the return. Anyone paid to prepare tax returns • Braille.
for others should have a thorough understanding of tax
matters. For more information on how to choose a tax pre- • Audio (MP3).
parer, go to Tips for Choosing a Tax Preparer on IRS.gov. • Plain Text File (TXT).
• Braille Ready File (BRF).
Employers can register to use Business Services On-
line. The Social Security Administration (SSA) offers on- Disasters. Go to IRS.gov/DisasterRelief to review the
line service at SSA.gov/employer for fast, free, and secure available disaster tax relief.

W-2 filing options to CPAs, accountants, enrolled agents, Getting tax forms and publications. Go to IRS.gov/
and individuals who process Form W-2, Wage and Tax Forms to view, download, or print all the forms, instruc-
Statement, and Form W-2c, Corrected Wage and Tax tions, and publications you may need. Or, you can go to
Statement. IRS.gov/OrderForms to place an order.

IRS social media. Go to IRS.gov/SocialMedia to see the Getting tax publications and instructions in eBook
various social media tools the IRS uses to share the latest format. Download and view most tax publications and
information on tax changes, scam alerts, initiatives, prod- instructions (including the Instructions for Form 1040) on
ucts, and services. At the IRS, privacy and security are our mobile devices as eBooks at IRS.gov/eBooks.
highest priority. We use these tools to share public infor- IRS eBooks have been tested using Apple's iBooks for
mation with you. Don’t post your social security number iPad. Our eBooks haven’t been tested on other dedicated
(SSN) or other confidential information on social media eBook readers, and eBook functionality may not operate
sites. Always protect your identity when using any social as intended.
networking site.
The following IRS YouTube channels provide short, in- Access your online account (individual taxpayers
formative videos on various tax-related topics in English, only). Go to IRS.gov/Account to securely access infor-
Spanish, and ASL. mation about your federal tax account.
• Youtube.com/irsvideos. • View the amount you owe and a breakdown by tax
• Youtube.com/irsvideosmultilingua. year.
• Youtube.com/irsvideosASL. • See payment plan details or apply for a new payment
plan.

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• Make a payment or view 5 years of payment history Ways to check on the status of your refund.
and any pending or scheduled payments.
• Go to IRS.gov/Refunds.
• Access your tax records, including key data from your
• Download the official IRS2Go app to your mobile de-
most recent tax return, and transcripts.
vice to check your refund status.
• View digital copies of select notices from the IRS.
• Call the automated refund hotline at 800-829-1954.
• Approve or reject authorization requests from tax pro-
The IRS can’t issue refunds before mid-February
fessionals.
for returns that claimed the EIC or the additional
• View your address on file or manage your communica- CAUTION! child tax credit (ACTC). This applies to the entire
tion preferences. refund, not just the portion associated with these credits.

Get a transcript of your return. With an online ac-
Making a tax payment. Payments of U.S. tax must be
count, you can access a variety of information to help you
remitted to the IRS in U.S. dollars. Digital assets are not
during the filing season. You can get a transcript, review
accepted. Go to IRS.gov/Payments for information on how
your most recently filed tax return, and get your adjusted
to make a payment using any of the following options.
gross income. Create or access your online account at
IRS.gov/Account. • IRS Direct Pay: Pay your individual tax bill or estimated
tax payment directly from your checking or savings ac-
Tax Pro Account. This tool lets your tax professional count at no cost to you.
submit an authorization request to access your individual
taxpayer IRS online account. For more information, go to • Debit Card, Credit Card, or Digital Wallet: Choose an
approved payment processor to pay online or by
IRS.gov/TaxProAccount.
phone.
Using direct deposit. The safest and easiest way to re- • Electronic Funds Withdrawal: Schedule a payment
ceive a tax refund is to e-file and choose direct deposit, when filing your federal taxes using tax return prepara-
which securely and electronically transfers your refund di- tion software or through a tax professional.
rectly into your financial account. Direct deposit also
avoids the possibility that your check could be lost, stolen, • Electronic Federal Tax Payment System: Best option
destroyed, or returned undeliverable to the IRS. Eight in for businesses. Enrollment is required.
10 taxpayers use direct deposit to receive their refunds. If • Check or Money Order: Mail your payment to the ad-
you don’t have a bank account, go to IRS.gov/ dress listed on the notice or instructions.
DirectDeposit for more information on where to find a bank
or credit union that can open an account online. • Cash: You may be able to pay your taxes with cash at
a participating retail store.
Reporting and resolving your tax-related identity • Same-Day Wire: You may be able to do same-day
theft issues. wire from your financial institution. Contact your finan-
• Tax-related identity theft happens when someone cial institution for availability, cost, and time frames.
steals your personal information to commit tax fraud.
Note. The IRS uses the latest encryption technology
Your taxes can be affected if your SSN is used to file a
to ensure that the electronic payments you make online,
fraudulent return or to claim a refund or credit.
by phone, or from a mobile device using the IRS2Go app
• The IRS doesn’t initiate contact with taxpayers by are safe and secure. Paying electronically is quick, easy,
email, text messages (including shortened links), tele- and faster than mailing in a check or money order.
phone calls, or social media channels to request or
verify personal or financial information. This includes What if I can’t pay now? Go to IRS.gov/Payments for
requests for personal identification numbers (PINs), more information about your options.
passwords, or similar information for credit cards, • Apply for an online payment agreement IRS.gov/ (
banks, or other financial accounts. OPA) to meet your tax obligation in monthly install-
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft ments if you can’t pay your taxes in full today. Once
Central webpage, for information on identity theft and you complete the online process, you will receive im-
data security protection for taxpayers, tax professio- mediate notification of whether your agreement has
nals, and businesses. If your SSN has been lost or been approved.
stolen or you suspect you’re a victim of tax-related • Use the Offer in Compromise Pre-Qualifier to see if
identity theft, you can learn what steps you should you can settle your tax debt for less than the full
take. amount you owe. For more information on the Offer in
• Get an Identity Protection PIN (IP PIN). IP PINs are Compromise program, go to IRS.gov/OIC.
six-digit numbers assigned to taxpayers to help pre-
vent the misuse of their SSNs on fraudulent federal in- Filing an amended return. Go to IRS.gov/Form1040X
come tax returns. When you have an IP PIN, it pre- for information and updates.
vents someone else from filing a tax return with your
SSN. To learn more, go to IRS.gov/IPPIN.

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Checking the status of your amended return. Go to these rights mean to you and how they apply. These are
IRS.gov/WMAR to track the status of Form 1040-X amen- your rights. Know them. Use them.
ded returns.
It can take up to 3 weeks from the date you filed What Can TAS Do for You?

CAUTION tem, and processing it can take up to 16 weeks.
! your amended return for it to show up in our sys- TAS can help you resolve problems that you can’t resolve
with the IRS. And their service is free. If you qualify for
their assistance, you will be assigned to one advocate
Understanding an IRS notice or letter you’ve re-
who will work with you throughout the process and will do
ceived. Go to IRS.gov/Notices to find additional informa-
everything possible to resolve your issue. TAS can help
tion about responding to an IRS notice or letter.
you if:
Responding to an IRS notice or letter. You can now • Your problem is causing financial difficulty for you,
upload responses to all notices and letters using the your family, or your business;
Document Upload Tool. For notices that require additional
action, taxpayers will be redirected appropriately on • You face (or your business is facing) an immediate
IRS.gov to take further action. To learn more about the threat of adverse action; or
tool, go to IRS.gov/Upload. • You’ve tried repeatedly to contact the IRS but no one
has responded, or the IRS hasn’t responded by the
Note. You can use Schedule LEP (Form 1040), Re- date promised.
quest for Change in Language Preference, to state a pref-
erence to receive notices, letters, or other written commu-
How Can You Reach TAS?
nications from the IRS in an alternative language. You may
not immediately receive written communications in the re-
TAS has offices in every state, the District of Columbia,
quested language. The IRS’s commitment to LEP taxpay-
and Puerto Rico. To find your advocate’s number:
ers is part of a multi-year timeline that began providing
translations in 2023. You will continue to receive communi- • Go to TaxpayerAdvocate.IRS.gov/Contact-Us;
cations, including notices and letters, in English until they Download Pub. 1546, The Taxpayer Advocate Service
•
are translated to your preferred language. Is Your Voice at the IRS, available at IRS.gov/pub/irs-
Contacting your local TAC. Keep in mind, many ques- pdf/p1546.pdf;
tions can be answered on IRS.gov without visiting a TAC. • Call the IRS toll free at 800-TAX-FORM
Go to IRS.gov/LetUsHelp for the topics people ask about (800-829-3676) to order a copy of Pub. 1546;
most. If you still need help, TACs provide tax help when a
• Check your local directory; or
tax issue can’t be handled online or by phone. All TACs
now provide service by appointment, so you’ll know in ad- • Call TAS toll free at 877-777-4778.
vance that you can get the service you need without long
wait times. Before you visit, go to IRS.gov/TACLocator to How Else Does TAS Help Taxpayers?
find the nearest TAC and to check hours, available serv-
ices, and appointment options. Or, on the IRS2Go app, TAS works to resolve large-scale problems that affect
under the Stay Connected tab, choose the Contact Us op- many taxpayers. If you know of one of these broad issues,
tion and click on “Local Offices.” report it to TAS at IRS.gov/SAMS. Be sure to not include
any personal taxpayer information.
The Taxpayer Advocate Service (TAS)
Is Here To Help You Low Income Taxpayer Clinics (LITCs)

What Is TAS? LITCs are independent from the IRS and TAS. LITCs rep-
resent individuals whose income is below a certain level
TAS is an independent organization within the IRS that
and who need to resolve tax problems with the IRS. LITCs
helps taxpayers and protects taxpayer rights. TAS strives
can represent taxpayers in audits, appeals, and tax collec-
to ensure that every taxpayer is treated fairly and that you
tion disputes before the IRS and in court. In addition,
know and understand your rights under the Taxpayer Bill
LITCs can provide information about taxpayer rights and
of Rights.
responsibilities in different languages for individuals who
speak English as a second language. Services are offered
How Can You Learn About Your Taxpayer for free or a small fee. For more information or to find an
Rights? LITC near you, go to the LITC page at
TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134,
The Taxpayer Bill of Rights describes 10 basic rights that Low Income Taxpayer Clinic List, at IRS.gov/pub/irs-pdf/
all taxpayers have when dealing with the IRS. Go to p4134.pdf.
TaxpayerAdvocate.IRS.gov to help you understand what

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                  To help us develop a more useful index, please let us know if you have ideas for index entries.
Index             See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                          Balance in  17
A                         Contributions to 16                             M
Archer MSAs  11 15-       Distributions from 16                           Medical expenses, qualified                    9 14, , 
Assistance (See Tax help) Grace period   17                                17 18, 
                          Qualifying for 16                               Medical savings accounts                       11 16-
C                         When to contribute 16                            Balance in 15
Contributions to:         Form:                                            Contributions to 12
  FSA 16                  5329  8 13,                                      Deemed distributions      14
  HRA 18                  5498–SA   8 13,                                  Distributions from 13
  HSA 5                   8853  15                                         Medicare Advantage MSAs                       16
  MSA 12                  8889  8 10,                                      Qualifying for 11
                                                                           When to contribute 13
D                         H                                               Medicare Advantage MSAs                        16
Death of:                 Health plans, high deductible             4 12, 
  HSA holder 10           Health reimbursement                            P
  MSA holder 15           arrangements    18 19,                          Preventive care 4
Distributions from:       Balance in  19                                  Publications (See Tax help)
  FSA 16                  Contributions to 18
  HRA 18                  Distributions from 18                           Q
  HSA 8                   Qualifying for 18                               Qualified HSA funding 
  MSA 13                  Health savings accounts 3 11-                    distribution  7
                          Balance in  10
E                         Contributions to 5                              T
Employer participation:   Deemed distributions  9                         Tax help 19
  FSA 17                  Distributions from 8                            Testing period:
  HRA 19                  Last-month rule  6                               Last-month rule  6
  HSA 10                  Partnerships 8                                   Qualified HSA funding distribution                  7
  MSA 15                  Qualifying for 3
                          Rollovers 7
F                         S corporations  8
Flexible spending         When to contribute 8
  arrangements  16 17,    High deductible health plan               4 12, 

Publication 969 (2023)                                                                                                         23

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