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            Department of the Treasury                   Contents
            Internal Revenue Service
                                                         What’s New    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
                                                         Reminders    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Publication 969
Cat. No. 24216S                                          Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
                                                         Health Savings Accounts (HSAs) . . . . . . . . . . . . . .                 3
                                                         Medical Savings Accounts (MSAs)                   . . . . . . . . . . .    11
Health Savings 
                                                         Archer MSAs         . . . . . . . . . . . . . . . . . . . . . . . . . .    11
                                                         Medicare Advantage MSAs . . . . . . . . . . . . . . . .                    16
Accounts
                                                         Flexible Spending Arrangements (FSAs) . . . . . . .                        16
                                                         Health Reimbursement Arrangements 
and Other                                                (HRAs)       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18
                                                         How To Get Tax Help         . . . . . . . . . . . . . . . . . . . . . .    19
Tax-Favored 
                                                         Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

Health Plans
                                                         Future Developments
For use in preparing
                                                         For the latest information about developments related to 
                                                         Pub.  969,  such  as  legislation  enacted  after  it  was 
2022 Returns
                                                         published, go to IRS.gov/Pub969.

                                                         What’s New
                                                         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 HSA even if the individual has 
                                                         coverage  outside  of  the  HDHP  during  these  periods  for 
                                                         telehealth and other remote care services.
                                                         Health FSA contribution and carryover for 2023.                         Rev-
                                                         enue Procedure 2022-38, October 18, 2022, provides that 
                                                         for tax years beginning in 2023, the dollar limitation under 
                                                         section 125(i) on voluntary employee salary reductions for 
                                                         contributions to health flexible spending arrangements is 
                                                         $3,050. If the cafeteria plan permits the carryover of un-
                                                         used amounts, the maximum carryover amount is $610.
                                                         Insulin products.     Public Law 117-169, August 16, 2022, 
                                                         amended section 223 to provide that an HDHP may have 
                                                         a $0 deductible for selected insulin products. The amend-
                                                         ment applies to plan years beginning after 2022.
                                                         Health FSA contribution and carryover for 2022.                         Rev-
                                                         enue  Procedure  2021-45,  November  10,  2021,  provides 
                                                         that  for  tax  years  beginning  in  2022,  the  dollar  limitation 
                                                         under section 125(i) on voluntary employee salary reduc-
Get forms and other information faster and easier at:    tions for contributions to health flexible spending arrange-
• IRS.gov (English)    • IRS.gov/Korean (한국어)            ments is $2,850. If the cafeteria plan permits the carryover 
• IRS.gov/Spanish (Español)  • IRS.gov/Russian (Pусский) of  unused  amounts,  the  maximum  carryover  amount  is 
• IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (Tiếng Việt) $570.

Jan 31, 2023

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Home testing for COVID-19 and personal protective The Coronavirus Aid, Relief, and Economic Security
equipment for preventing spread of COVID-19. News Act (CARES Act, P.L. 116-136, March 27, 2020) made the
Release IR-2021-181, September 10, 2021, reminds that following changes.
the cost of home testing for COVID-19 and the costs of
HSA.
personal protective equipment, such as masks, hand san-
itizer and sanitizing wipes, for the primary purpose of pre- • Telehealth and other remote care coverage with plan
venting the spread of COVID-19 are eligible medical ex- years beginning before 2022 is disregarded for deter-
penses that can be paid or reimbursed under health mining who is an eligible individual.
FSAs, HSAs, HRAs, or Archer MSAs. A high deductible health plan (HDHP) year beginning
•
Surprise billing for emergency services or air ambu- before 2022 may have a $0 deductible for telehealth
lance services. Public Law 116-260, December 27, and other remote care services.
2020, amended section 223 to provide that an HDHP may
provide benefits under federal and state anti-“surprise bill- • Over-the-counter medicine (whether or not prescri-
bed) and menstrual care products are treated as med-
ing” laws with a $0 deductible. Also, an “eligible individual”
ical care for amounts paid after 2019.
remains eligible to make contributions to its HSA even if
the individual receives anti-“surprise billing” benefits out- Archer MSA.
side of the HDHP. The amendment applies to plan years • Over-the-counter medicine (whether or not prescri-
beginning after 2021. bed) and menstrual care products are treated as med-
ical care for amounts paid after 2019.
Note. Anti-“surprise billing” laws generally protect indi-
viduals from “surprise billing” for items like emergency Health FSA.
medical services, some non-emergency medical services, • Over-the-counter medicine (whether or not prescri-
and air ambulance services. bed) and menstrual care products are treated as med-
Ask your insurance provider whether your HDHP ical care for amounts incurred after 2019.
! and any other coverage meet the requirements of HRA.
CAUTION section 223.
• Over-the-counter medicine (whether or not prescri-
Ask your HSA trustee whether the HSA and bed) and menstrual care products are treated as med-
ical care for amounts incurred after 2019.
! trustee meet the requirements of section 223.
CAUTION The IRS will provide any further updates as soon as
they are available at IRS.gov/Coronavirus.
See also Notice 2020-29, 2020-22 I.R.B. 864, and
Notice 2020-33, 2020-22 I.R.B. 868, available at
Reminders IRS.gov/pub/irs-irbs/irb20-22.pdf, for additional
The Consolidated Appropriations Act (P.L. 116-260, information.
December 27, 2020) provides for the following optional Affordable Care Act guidance. Notice 2013-54,
plan amendments. See Notice 2021-15, available at 2013-40 I.R.B. 287, available at IRS.gov/irb/2013-40_IRB/
IRS.gov/pub/irs-drop/n-21-15.pdf. ar11.html, as supplemented by Notice 2015-87, provides
• A health FSA may allow participants to carry over guidance for employers on the application of the Afforda-
unused benefits from a plan year ending in 2020 to a ble Care Act (ACA) to FSAs and Health Reimbursement
plan year ending in 2021 and from a plan year ending Arrangements (HRAs).
in 2021 to a plan year ending in 2022. For more information on the ACA, go to IRS.gov/
• A health FSA may extend the grace period for using Affordable-Care-Act.
unused benefits for a plan year ending in 2020 or Photographs of missing children. The Internal Reve-
2021 to 12 months after the end of the plan year. nue Service is a proud partner with the National Center for
• A health FSA may allow an individual who ceases Missing & Exploited Children® (NCMEC). Photographs of
participation in a health FSA during calendar year missing children selected by the Center may appear in
2020 or 2021 to continue to receive reimbursements this publication on pages that would otherwise be blank.
from unused benefits through the end of the plan year You can help bring these children home by looking at the
in which participation ceased and through any grace photographs and calling 800-THE-LOST (800-843-5678)
period. if you recognize a child.
• For plan years ending in 2021, a health FSA may
allow an employee to make an election to modify
prospectively the amount (but not in excess of any Introduction
applicable dollar limitation) of the employee's
contributions to the health FSA (without regard to any Various programs are designed to give individuals tax ad-
change in status). vantages to offset health care costs. This publication ex-
plains the following programs.
• Health Savings Accounts (HSAs).

Page 2 Publication 969 (2022)

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• Medical Savings Accounts (Archer MSAs and Medi- Ordering tax forms, instructions, and publications.
care Advantage MSAs). Go to IRS.gov/OrderForms to order current forms, instruc-
tions, and publications; call 800-829-3676 to order
• Health Flexible Spending Arrangements (FSAs).
prior-year forms and instructions. The IRS will process
• Health Reimbursement Arrangements (HRAs). your order for forms and publications as soon as possible.
An HSA may receive contributions from an eligible indi- Don’t resubmit requests you’ve already sent us. You can
vidual or any other person, including an employer or a get forms and publications faster online.
family member, on behalf of an eligible individual. Contri-
butions, other than employer contributions, are deductible
on the eligible individual’s return whether or not the indi- Health Savings Accounts
vidual itemizes deductions. Employer contributions aren’t
included in income. Distributions from an HSA that are (HSAs)
used to pay qualified medical expenses aren’t taxed.
An Archer MSA may receive contributions from an eligi- An HSA is a tax-exempt trust or custodial account you set
ble individual and the eligible individual’s employer, but up with a qualified HSA trustee to pay or reimburse certain
not both in the same year. Contributions by the individual medical expenses you incur. You must be an eligible indi-
are deductible whether or not the individual itemizes de- vidual to contribute to an HSA.
ductions. Employer contributions aren’t included in in-
come. Distributions from an Archer MSA that are used to No permission or authorization from the IRS is neces-
pay qualified medical expenses aren’t taxed. sary to establish an HSA. You set up an HSA with a
A Medicare Advantage MSA is an Archer MSA desig- trustee. A qualified HSA trustee can be a bank, an insur-
nated by Medicare to be used solely to pay the qualified ance company, or anyone already approved by the IRS to
medical expenses of the account holder who is enrolled in be a trustee of individual retirement arrangements (IRAs)
Medicare. Contributions can be made only by Medicare. or Archer MSAs. The HSA can be established through a
The contributions aren’t included in your income. Distribu- trustee that is different from your health plan provider.
tions from a Medicare Advantage MSA that are used to Your employer may already have some information on
pay qualified medical expenses aren’t taxed. HSA trustees in your area.
A health FSA may receive contributions from an eligible
individual. Employers may also contribute. Contributions If you have an Archer MSA, you can generally roll
aren’t includible in income. Reimbursements from an FSA TIP it over into an HSA tax free. See Rollovers, later.
that are used to pay qualified medical expenses aren’t
taxed.
An HRA must receive contributions from the employer What are the benefits of an HSA? You may enjoy sev-
only. Employees may not contribute. Contributions aren’t eral benefits from having an HSA.
includible in income. Reimbursements from an HRA that • You can claim a tax deduction for contributions you, or
are used to pay qualified medical expenses aren’t taxed. someone other than your employer, make to your
HSA even if you don’t itemize your deductions on
Comments and suggestions. We welcome your com- Schedule A (Form 1040).
ments about this publication and suggestions for future
editions. • Contributions to your HSA made by your employer (in-
You can send us comments through IRS.gov/ cluding contributions made through a cafeteria plan)
FormComments. Or, you can write to the Internal Reve- may be excluded from your gross income.
nue Service, Tax Forms and Publications, 1111 Constitu- • The contributions remain in your account until you use
tion Ave. NW, IR-6526, Washington, DC 20224. them.
Although we can’t respond individually to each com-
ment received, we do appreciate your feedback and will • The interest or other earnings on the assets in the ac-
count are tax free.
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send • Distributions may be tax free if you pay qualified medi-
tax questions, tax returns, or payments to the above ad- cal expenses. See Qualified medical expenses, later.
dress. An HSA is “portable.” It stays with you if you change
•
Getting answers to your tax questions. If you have employers or leave the work force.
a tax question not answered by this publication or the How
To Get Tax Help section at the end of this publication, go Qualifying for an HSA Contribution
to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the search To be an eligible individual and qualify for an HSA contri-
feature or viewing the categories listed. bution, you must meet the following requirements.
Getting tax forms, instructions, and publications. • You are covered under a high deductible health plan
Go to IRS.gov/Forms to download current and prior-year (HDHP), described later, on the first day of the month.
forms, instructions, and publications.
• You have no other health coverage except what is
permitted under Other health coverage, later.

Publication 969 (2022) Page 3

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• You aren’t enrolled in Medicare. f. Metabolic, nutritional, and endocrine conditions.
• You can’t be claimed as a dependent on someone g. Musculoskeletal disorders.
else’s 2022 tax return.
h. Obstetric and gynecological conditions.
Under the last-month rule, you are considered to
TIP be an eligible individual for the entire year if you i. Pediatric conditions.
are an eligible individual on the first day of the last j. Vision and hearing disorders.
month of your tax year (December 1 for most taxpayers).
For more information on screening services, see
If you meet these requirements, you are an eligible indi- Notice 2004-23, 2004-15 I.R.B. 725, available at
vidual even if your spouse has non-HDHP family cover- IRS.gov/irb/2004-15_IRB#NOT-2004-23.
age, provided your spouse’s coverage doesn’t cover you. For additional guidance on preventive care, see
Notice 2004-50, 2004-2 C.B. 196, Q&A 26 and 27,
Also, you may be an eligible individual even if you re- available at IRS.gov/irb/2004-33_IRB#NOT-2004-50;
ceive hospital care or medical services under any law ad- and Notice 2013-57, 2013-40 I.R.B. 293, available at
ministered by the Secretary of Veterans Affairs for a serv- IRS.gov/pub/irs-drop/n-13-57.pdf. Preventive care
ice-connected disability. can also include coverage for treatment of individuals
If another taxpayer is entitled to claim you as a with certain chronic conditions listed in the Appendix
of Notice 2019-45, 2019-32 I.R.B. 593, if such serv-
! dependent, you can’t claim a deduction for an
CAUTION HSA contribution. This is true even if the other ices were received or items were incurred on or after
person doesn’t receive an exemption deduction for you July 17, 2019. For information on preventive care for
because the exemption amount is zero for tax years 2018 chronic conditions, see Notice 2019-45, 2019-32
through 2025. I.R.B. 593, available at IRS.gov/pub/irs-drop/
n-19-45.pdf.
Each spouse who is an eligible individual who
TIP wants an HSA must open a separate HSA. You The following table shows the minimum annual deducti-
can’t have a joint HSA. ble and maximum annual deductible and other
out-of-pocket expenses for HDHPs for 2022.
High deductible health plan (HDHP). An HDHP has: Self-only coverage Family coverage
• A higher annual deductible than typical health plans, Minimum annual
and deductible $1,400 $2,800
Maximum annual
• A maximum limit on the sum of the annual deductible deductible and
and out-of-pocket medical expenses that you must other out-of-pocket
pay for covered expenses. Out-of-pocket expenses expenses* $7,050 $14,100
include copayments and other amounts, but don’t in-
clude premiums. * 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
and out-of-pocket expenses for services within the network should be
An HDHP may provide preventive care benefits without used to figure whether the limit applies.
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
1. Periodic health evaluations, including tests and diag- 2023.
nostic procedures ordered in connection with routine
examinations, such as annual physicals. Self-only coverage Family coverage
Minimum annual
2. Routine prenatal and well-child care. deductible $1,500 $3,000
3. Child and adult immunizations. Maximum annual
deductible and
4. Tobacco cessation programs. other out-of-pocket
5. Obesity weight-loss programs. expenses* $7,500 $15,000

6. Screening services. This includes screening services * This limit doesn’t apply to deductibles and expenses for out-of-network
for the following. services if the plan uses a network of providers. Instead, only deductibles
and out-of-pocket expenses for services within the network should be
a. Cancer. used to figure whether the limit applies.
b. Heart and vascular diseases. Self-only HDHP coverage is HDHP coverage for only
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.

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Example. You, an eligible individual, and your de- However, an employee can make contributions to an
pendent child are covered under an “employee plus one” HSA while covered under an HDHP and one or more of
HDHP offered by your employer. This is family HDHP cov- the following arrangements.
erage.
• Limited-purpose health FSA or HRA. These arrange-
Family plans that don’t meet the high deductible ments can pay or reimburse the items listed earlier un-
rules. There are some family plans that have deducti- der Other health coverage except long-term care.
bles for both the family as a whole and for individual family Also, these arrangements can pay or reimburse pre-
members. Under these plans, if you meet the individual ventive care expenses because they can be paid with-
deductible for one family member, you don’t have to meet out having to satisfy the deductible.
the higher annual deductible amount for the family. If ei- • Suspended HRA. Before the beginning of an HRA
ther the deductible for the family as a whole or the deduc- coverage period, you can elect to suspend the HRA.
tible for an individual family member is less than the mini- The HRA doesn’t pay or reimburse, at any time, the
mum annual deductible for family coverage, the plan medical expenses incurred during the suspension pe-
doesn’t qualify as an HDHP. riod except preventive care and items listed under
Other health coverage. If you (and your spouse, if Other health coverage, earlier. When the suspension
you have family coverage) have HDHP coverage, you period ends, you are no longer eligible to make contri-
can’t generally have any other health coverage. However, butions to an HSA.
you can still be an eligible individual even if your spouse • Post-deductible health FSA or HRA. These arrange-
has non-HDHP coverage, provided you aren’t covered by ments don’t pay or reimburse any medical expenses
that plan. incurred before the minimum annual deductible
You can have additional insurance that provides bene- amount is met. The deductible for these arrangements
fits only for the following items. doesn’t have to be the same as the deductible for the
• Liabilities incurred under workers’ compensation laws, HDHP, but benefits may not be provided before the
tort liabilities, or liabilities related to ownership or use minimum annual deductible amount is met.
of property. • Retirement HRA. This arrangement pays or reimbur-
• A specific disease or illness. ses only those medical expenses incurred after retire-
ment. After retirement, you are no longer eligible to
• A fixed amount per day (or other period) of hospitali- make contributions to an HSA.
zation.
Health FSA—grace period. Coverage during a
You can also have coverage (whether provided through
grace period by a general purpose health FSA is allowed
insurance or otherwise) for the following items.
if the balance in the health FSA at the end of its prior year
• Accidents. plan is zero. See Flexible Spending Arrangements
• Disability. (FSAs), later.
• Dental care.
Contributions to an HSA
• Vision care.
Any eligible individual can contribute to an HSA. For an
• Long-term care.
employee’s HSA, the employee, the employee’s em-
• Telehealth and other remote care (for the periods de- ployer, or both may contribute to the employee’s HSA in
scribed under What s New). the same year. For an HSA established by a self-em-
Plans in which substantially all of the coverage is ployed (or unemployed) individual, the individual can con-
tribute. Family members or any other person may also
! through the items listed earlier aren’t HDHPs. For make contributions 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 your HSA depends on the type of HDHP coverage you
deductible 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 2022, if you have self-only HDHP coverage, you can
Other employee health plans. An employee cov- contribute up to $3,650. If you have family HDHP cover-
ered by an HDHP and a health FSA or an HRA that pays age, you can contribute up to $7,300.
or reimburses qualified medical expenses can’t generally
make contributions to an HSA. FSAs and HRAs are dis-
cussed later.

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       For 2023, if you have self-only HDHP coverage,                 January. . . . . . . . . . . . . . . .     -0-
TIP    you can contribute up to $3,850. If you have fam-              February . . . . . . . . . . . . . . . .   -0-
       ily  HDHP  coverage,  you  can  contribute  up  to             March. . . . . . . . . . . . . . . . . .   -0-
$7,750.                                                               April. . . . . . . . . . . . . . . . . . . -0-
                                                                      May. . . . . . . . . . . . . . . . . . .   -0-
If  you  are,  or  were  considered  (under  the last-month           June. . . . . . . . . . . . . . . . . .    -0-
rule,  discussed  later),  an  eligible  individual  for  the  entire July. . . . . . . . . . . . . . . . . . .  -0-
year  and  didn’t  change  your  type  of  coverage,  you  can        August. . . . . . . . . . . . . . . . .    -0-
contribute the full amount based on your type of coverage.            September. . . . . . . . . . . . . .       -0-
However, if you weren’t an eligible individual for the entire         October  . . . . . . . . . . . . . . . .   -0-
year or changed your coverage during the year, your con-              November. . . . . . . . . . . . . . .      -0-
                                                                      December. . . . . . . . . . . . . . .      $7,300.00
tribution limit is the greater of:
                                                                      Total for all months. . . . . . . .        $7,300.00
1. The limitation shown on the Line 3 Limitation Chart                Limitation. Divide the total by 12         $608.33
    and Worksheet in the Instructions for Form 8889, 
    Health Savings Accounts (HSAs); or                                You  would  include  $6,691.67  ($7,300.00  −  $608.33)  in 
                                                                      your gross income on your 2023 tax return. Also, a 10% 
2. The maximum annual HSA contribution based on                       additional tax applies to this amount.
    your HDHP coverage (self-only or family) on the first 
    day of the last month of your tax year.                           Example 2.             You, age 39, have self-only HDHP cover-
                                                                      age on January 1, 2022. You change to family HDHP cov-
       If you had family HDHP coverage on the first day 
                                                                      erage  on  November  1,  2022.  Because  you  have  family 
TIP    of the last month of your tax year, your contribu-
                                                                      HDHP  coverage  on  December  1,  2022,  you  contribute 
       tion limit for 2022 is $7,300 even if you changed 
                                                                      $7,300 for 2022.
coverage during the year.
                                                                      You fail to be an eligible individual in March 2023. Be-
                                                                      cause  you  didn’t  remain  an  eligible  individual  during  the 
Last-month rule. Under the last-month rule, if you are an             testing period (December 1, 2022, through December 31, 
eligible individual on the first day of the last month of your        2023), you must include in income the contribution made 
tax year (December 1 for most taxpayers), you are consid-             that wouldn’t have been made except for the last-month 
ered an eligible individual for the entire year. You are trea-        rule. You use the worksheet in the Form 8889 instructions 
ted  as  having  the  same  HDHP  coverage  for  the  entire          to determine this amount.
year as you had on the first day of the last month if you 
didn’t otherwise have coverage.                                       January. . . . . . . . . . . . . . . .     $3,650.00
Testing  period. If  contributions  were  made  to  your              February . . . . . . . . . . . . . . . .   $3,650.00
HSA based on you being an eligible individual for the en-             March. . . . . . . . . . . . . . . . . .   $3,650.00
tire year under the last-month rule, you must remain an eli-          April. . . . . . . . . . . . . . . . . . . $3,650.00
gible  individual  during  the  testing  period.  For  the            May. . . . . . . . . . . . . . . . . . .   $3,650.00
last-month  rule,  the  testing  period  begins  with  the  last      June. . . . . . . . . . . . . . . . . .    $3,650.00
month  of  your  tax  year  and  ends  on  the  last  day  of  the    July. . . . . . . . . . . . . . . . . . .  $3,650.00
12th month following that month (for example, December                August. . . . . . . . . . . . . . . . .    $3,650.00
1, 2021, through December 31, 2022).                                  September. . . . . . . . . . . . . .       $3,650.00
If you fail to remain an eligible individual during the test-         October  . . . . . . . . . . . . . . . .   $3,650.00
ing period, for reasons other than death or becoming disa-            November. . . . . . . . . . . . . . .      $7,300.00
bled, you will have to include in income the total contribu-          December. . . . . . . . . . . . . . .      $7,300.00
tions  made  to  your  HSA  that  wouldn’t  have  been  made          Total for all months. . . . . . . .        $51,100.00
except for the last-month rule. You include this amount in            Limitation. Divide the total by 12         $4,258.33
your income in the year in which you fail to be an eligible 
                                                                      You would include $3,041.67 ($7,300.00 − $4,258.33) in 
individual. This amount is also subject to a 10% additional 
                                                                      your gross income on your 2023 tax return. Also, a 10% 
tax. The income and additional tax are calculated on Form 
                                                                      additional tax applies to this amount.
8889, Part III.
                                                                      Additional contribution.                 If you are an eligible individual 
Example 1.     You, age 53, become an eligible individ-
                                                                      who is age 55 or older at the end of your tax year, your 
ual on December 1, 2022. You have family HDHP cover-
                                                                      contribution limit is increased by $1,000. For example, if 
age on that date. Under the last-month rule, you contrib-
                                                                      you  have  self-only  coverage,  you  can  contribute  up  to 
ute $7,300 to your HSA.
                                                                      $4,650  (the  contribution  limit  for  self-only  coverage 
You  fail  to  be  an  eligible  individual  in  June  2023.  Be-
                                                                      ($3,650) plus the additional contribution of $1,000). How-
cause  you  didn’t  remain  an  eligible  individual  during  the 
                                                                      ever, see Enrolled in Medicare, later.
testing period (December 1, 2022, through December 31, 
2023), you must include in your 2023 income the contribu-                      If you have more than one HSA in 2022, your total 
tions made in 2022 that wouldn’t have been made except                !        contributions to all the HSAs can’t be more than 
for the last-month rule. You use the worksheet in the Form            CAUTION  the limits discussed earlier.
8889 instructions to determine this amount.

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Reduction of contribution limit. You must reduce the purpose, a SEP IRA or SIMPLE IRA is ongoing if an em-
amount that can be contributed (including any additional ployer contribution is made for the plan year ending with
contribution) to your HSA by the amount of any contribu- or within the tax year in which the distribution would be
tion made to your Archer MSA (including employer contri- made.
butions) for the year. A special rule applies to married The maximum qualified HSA funding distribution de-
people, discussed next, if each spouse has family cover- pends on the HDHP coverage (self-only or family) you
age under an HDHP. have on the first day of the month in which the contribution
is made and your age as of the end of the tax year. The
Rules for married people. If either spouse has fam-
distribution must be made directly by the trustee of the
ily HDHP coverage, both spouses are treated as having
IRA to the trustee of the HSA. The distribution isn’t inclu-
family HDHP coverage. If each spouse has family cover-
ded in your income, isn’t deductible, and reduces the
age under a separate plan, the contribution limit for 2022
amount that can be contributed to your HSA. The qualified
is $7,300. You must reduce the limit on contributions, be-
HSA funding distribution is shown on Form 8889 for the
fore taking into account any additional contributions, by
year in which the distribution is made.
the amount contributed to both spouses’ Archer MSAs.
You can generally make only one qualified HSA fund-
After that reduction, the contribution limit is split equally
ing distribution during your lifetime. However, if you make
between the spouses unless you agree on a different divi-
a distribution during a month when you have self-only
sion.
HDHP coverage, you can make another qualified HSA
The rules for married people apply only if both funding distribution in a later month in that tax year if you
! spouses are eligible individuals. change to family HDHP coverage. The total qualified HSA
CAUTION funding distribution can’t be more than the contribution
limit for family HDHP coverage plus any additional contri-
If both spouses are 55 or older and not enrolled in Med- bution to which you are entitled.
icare, each spouse’s contribution limit is increased by the
additional contribution. If both spouses meet the age re- Example. In 2022, you are an eligible individual, age
quirement, the total contributions under family coverage 57, with self-only HDHP coverage. You can make a quali-
can’t be more than $9,300. Each spouse must make the fied HSA funding distribution of $4,650 ($3,650 plus
additional contribution to its own HSA. $1,000 additional contribution).
Example. For 2022, you and your spouse are both eli- Funding distribution—testing period. You must re-
gible individuals. You each have family coverage under main an eligible individual during the testing period. For a
separate HDHPs. You are 58 years old and your spouse qualified HSA funding distribution, the testing period be-
is 53. You and your spouse can split the family contribu- gins with the month in which the qualified HSA funding
tion limit ($7,300) equally or you can agree on a different distribution is contributed and ends on the last day of the
division. If you split it equally, you can contribute $4,650 to 12th month following that month. For example, if a quali-
an HSA (one-half the maximum contribution for family fied HSA funding distribution is contributed to your HSA
coverage ($3,650) + $1,000 additional contribution) and on August 10, 2022, your testing period begins in August
your spouse can contribute $3,650 to an HSA. 2022, and ends on August 31, 2023.
If you fail to remain an eligible individual during the test-
Employer contributions. You must reduce the ing period, for reasons other than death or becoming disa-
amount you, or any other person, can contribute to your bled, you will have to include in income the qualified HSA
HSA by the amount of any contributions made by your funding distribution. You include this amount in income in
employer that are excludable from your income. This in- the year in which you fail to be an eligible individual. This
cludes amounts contributed to your account by your em- amount is also subject to a 10% additional tax. The in-
ployer through a cafeteria plan. come and the additional tax are calculated on Form 8889,
Enrolled in Medicare. Beginning with the first month Part III.
you are enrolled in Medicare, your contribution limit is Each qualified HSA funding distribution allowed has its
zero. This rule applies to periods of retroactive Medicare own testing period. For example, you are an eligible indi-
coverage. So, if you delayed applying for Medicare and vidual, age 45, with self-only HDHP coverage. On June
later your enrollment is backdated, any contributions to 18, 2022, you make a qualified HSA funding distribution.
your HSA made during the period of retroactive coverage On July 27, 2022, you enroll in family HDHP coverage and
are considered excess. See Excess contributions, later. on August 17, 2022, you make a qualified HSA funding
distribution. Your testing period for the first distribution be-
Example. You turned age 65 in July 2022 and enrol- gins in June 2022 and ends on June 30, 2023. Your test-
led in Medicare. You had an HDHP with self-only cover- ing period for the second distribution begins in August
age and are eligible for an additional contribution of 2022 and ends on August 31, 2023.
$1,000. Your contribution limit is $2,325 ($4,650 × 6 ÷ 12). The testing period rule that applies under the
last-month rule (discussed earlier) doesn’t apply to
Qualified HSA funding distribution. A qualified HSA amounts contributed to an HSA through a qualified HSA
funding distribution may be made from your traditional IRA funding distribution. If you remain an eligible individual
or Roth IRA to your HSA. This distribution can’t be made during the entire funding distribution testing period, then
from an ongoing SEP IRA or SIMPLE IRA. For this no amount of that distribution is included in income and

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won’t be subject to the additional tax for failing to meet the corporation and includible in the shareholder-employee’s
last-month rule testing period. gross income. The shareholder-employee can deduct the
contribution made to the shareholder-employee’s HSA.
Rollovers
Form 8889. Report all contributions to your HSA on
A rollover contribution isn’t included in your income, isn’t Form 8889 and file it with your Form 1040, 1040-SR, or
deductible, and doesn’t reduce your contribution limit. 1040-NR. You should include all contributions made for
2022, including those made from January 1, 2022,
Archer MSAs and other HSAs. You can roll over through April 15, 2023, that are designated for 2022. Con-
amounts from Archer MSAs and other HSAs into an HSA. tributions made by your employer and qualified HSA fund-
You don’t have to be an eligible individual to make a roll- ing distributions are also shown on the form.
over contribution from your existing HSA to a new HSA. You should receive Form 5498-SA, HSA, Archer MSA,
Rollover contributions don’t need to be in cash. Rollovers or Medicare Advantage MSA Information, from the trustee
aren’t subject to the annual contribution limits. showing the amount contributed to your HSA during the
You must roll over the amount within 60 days after the year. Your employer’s contributions will also be shown on
date of receipt. You can make only one rollover contribu- Form W-2, box 12, code W. Follow the Instructions for
tion to an HSA during a 1-year period. Form 8889. Report your HSA deduction on Form 1040,
1040-SR, or 1040-NR.
Note. If you instruct the trustee of your HSA to transfer
funds directly to the trustee of another of your HSAs, the Excess contributions. You will have excess contribu-
transfer isn’t considered a rollover. There is no limit on the tions if the contributions to your HSA for the year are
number of these transfers. Don’t include the amount trans- greater than the limits discussed earlier. Excess contribu-
ferred in income, deduct it as a contribution, or include it tions aren’t deductible. Excess contributions made by
as a distribution on Form 8889. your employer are included in your gross income. If the
excess contribution isn’t included in box 1 of Form W-2,
When To Contribute you must report the excess as “Other income” on your tax
return.
You can make contributions to your HSA for 2022 through Generally, you must pay a 6% excise tax on excess
April 15, 2023. If you fail to be an eligible individual during contributions. See Form 5329, Additional Taxes on Quali-
2022, you can still make contributions through April 15, fied Plans (Including IRAs) and Other Tax-Favored Ac-
2023, 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, 2023, through April 15, 2023, that are al- You may withdraw some or all of the excess contribu-
located to 2022. 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 2022. The drawn if you meet the following conditions.
contribution will be reported on your 2023 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 made by your employer aren’t included in contributions and include the earnings in “Other in-
your income. Contributions to an employee’s account by come” on your tax return for the year you withdraw the
an employer using the amount of an employee’s salary re- contributions and earnings.
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.
cluded in the partner’s gross income. Contributions by a
You may be able to deduct excess contributions for previ-
partnership to a partner’s HSA for services rendered are
ous years that are still in your HSA. The excess contribu-
treated as guaranteed payments that are deductible by
tion you can deduct for the current year is the lesser of the
the partnership and includible in the partner’s gross in-
following two amounts.
come. In both situations, the partner can deduct the con-
tribution made to the partner’s HSA. • Your maximum HSA contribution limit for the year mi-
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

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Amounts contributed for the year include contributions b. The person had gross income of $4,400 or more;
by you, your employer, and any other person. They also or
include any qualified HSA funding distribution made to
c. You, or your spouse if filing jointly, could be
your HSA. Any excess contribution remaining at the end
claimed as a dependent on someone else’s 2022
of a tax year is subject to the excise tax. See Form 5329.
return.
Distributions From an HSA For this purpose, a child of parents that are di-
TIP vorced, separated, or living apart for the last 6
You will generally pay medical expenses during the year months of the calendar year is treated as the de-
without being reimbursed by your HDHP until you reach pendent of both parents whether or not the custodial pa-
the annual deductible for the plan. When you pay medical rent releases the claim to the child’s exemption.
expenses during the year that aren’t reimbursed by your
HDHP, you can ask the trustee of your HSA to send you a You can’t deduct qualified medical expenses as
distribution from your HSA. ! an itemized deduction on Schedule A (Form
CAUTION 1040) that are equal to the tax-free distribution
You can receive tax-free distributions from your HSA to from your HSA.
pay or be reimbursed for qualified medical expenses you
incur after you establish the HSA. If you receive distribu- Insurance premiums. You can’t treat insurance pre-
tions for other reasons, the amount you withdraw will be miums as qualified medical expenses unless the premi-
subject to income tax and may be subject to an additional ums are for any of the following.
20% tax. You don’t have to make withdrawals from your
HSA each year. 1. Long-term care insurance.
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 distribu-
law determines when an HSA is established. An HSA that tion from your HSA. See Pub. 502 for more information on
is funded by amounts rolled over from an Archer MSA or this 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 2022. Your account ceases to be an HSA as of Janu-
following persons. ary 1, 2022, and you must include the fair market
value of all assets in the account as of January 1,
1. You and your spouse. 2022, on Form 8889.
2. All dependents you claim on your tax return. • You used any portion of any of your HSAs as security
3. Any person you could have claimed as a dependent for a loan at any time in 2022. You must include the
on your return except that: fair market value of the assets used as security for the
loan as income on Form 1040, 1040-SR, or 1040-NR.
a. The person filed a joint return;

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Examples of prohibited transactions include the direct Exceptions. There is no additional tax on distribu-
or indirect: tions made after the date you are disabled, reach age 65,
or die.
• Sale, exchange, or leasing of property between you
and the HSA;
Balance in an HSA
• Lending of money between you and the HSA;
• Furnishing goods, services, or facilities between you An HSA is generally exempt from tax. You are permitted
and the HSA; and to take a distribution from your HSA at any time; however,
only those amounts used exclusively to pay for qualified
• Transfer to or use by you, or for your benefit, of any
medical expenses are tax free. Amounts that remain at
assets of the HSA.
the end of the year are generally carried over to the next
Any deemed distributions won’t be treated as used to year (see Excess contributions, earlier). Earnings on
pay qualified medical expenses. These distributions are amounts in an HSA aren’t included in your income while
included in your income and are subject to the additional held in the HSA.
20% tax, discussed later.
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- Spouse is the designated beneficiary. If your spouse
ously paid or reimbursed from another source, and 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.
Spouse isn’t the designated beneficiary. If your
Don’t send these records with your tax return. Keep them spouse isn’t the designated beneficiary of your HSA:
with your tax records.
• 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 quali- You must file Form 8889 with your Form 1040, 1040-SR,
fied medical expenses. Follow the instructions for the or 1040-NR if you (or your spouse, if married filing jointly)
form and file it with your Form 1040, 1040-SR, or had any activity in your HSA during the year. You must file
1040-NR. the form even if only your employer or your spouse’s em-
ployer made contributions to the HSA.
• If you don’t use a distribution from your HSA for quali-
fied medical expenses, you must pay tax on the distri- If, during the tax year, you are the beneficiary of two or
bution. Report the amount on Form 8889 and file it more HSAs or you are a beneficiary of an HSA and you
with your Form 1040, 1040-SR, or 1040-NR. You may have your own HSA, you must complete a separate Form
have to pay an additional 20% tax on your taxable dis- 8889 for each HSA. Enter “statement” at the top of each
tribution. Form 8889 and complete the form as instructed. Next,
HSA administration and maintenance fees with- complete a controlling Form 8889 combining the amounts
TIP drawn by the trustee aren’t reported as distribu- shown on each of the statement Forms 8889. Attach the
tions from the HSA. statements to your tax return after the controlling Form
8889.
Additional tax. There is an additional 20% tax on the
part of your distributions not used for qualified medical ex- Employer Participation
penses. Figure the tax on Form 8889 and file it with your
Form 1040, 1040-SR, or 1040-NR. This section contains the rules that employers must follow
if they decide to make HSAs available to their employees.
Unlike the previous discussions, “you” refers to the em-
ployer and not to the employee.

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Health plan. If you want your employees to be able to Employment taxes. Amounts you contribute to your
have HSAs, they must have an HDHP. You can provide employees’ HSAs aren’t generally subject to employment
no additional coverage other than those exceptions listed taxes. You must report the contributions in box 12 of the
earlier under Other health coverage. Form W-2 you file for each employee. This includes the
amounts the employee elected to contribute through a
Contributions. You can make contributions to your em- cafeteria plan. Enter code W in box 12.
ployees’ HSAs. You deduct the contributions on your
business income tax return for the year in which you make
the contributions. If the contribution is allocated to the
prior year, you still deduct it in the year in which you made Medical Savings Accounts
the contribution.
(MSAs)
For more information on employer contributions, see
Notice 2008-59, 2008-29 I.R.B. 123, questions 23 through
Archer MSAs were created to help self-employed individ-
27, available at IRS.gov/irb/2008-29_IRB/ar11.html.
uals and employees of certain small employers meet the
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:
CAUTION
• The same amount, or
1. You were an active participant for any tax year ending
• The same percentage of the annual deductible limit before 2008, or
under the HDHP covering the employees.
2. You became an active participant for a tax year end-
The comparability rules don’t apply to contributions made
ing after 2007 by reason of coverage under a high de-
through a cafeteria plan.
ductible health plan (HDHP) of an Archer MSA partici-
Comparable participating employees. Comparable pating 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,
Archer MSAs
full-time, or former employees).
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, estab- • You can claim a tax deduction for contributions you
lishes an HSA and notifies you that the eligible employee make even if you don’t itemize your deductions on
has established an HSA will receive a comparable contri- Schedule A (Form 1040) or Schedule A (Form
bution to the HSA for the prior year. For a sample of the 1040-NR).
notice, see Regulations section 54.4980G-4 A-14(c). You
will meet the contribution requirement for these employ- • The interest or other earnings on the assets in your
ees if by April 15, 2023, you contribute comparable Archer MSA are tax free.
amounts plus reasonable interest to the employees’ HSAs • Distributions may be tax free if you pay qualified medi-
for the prior 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- • An Archer MSA is “portable,” so it stays with you if you
pating employees. change employers or leave the work force.
Excise tax. If you made contributions to your employ-
ees’ HSAs that weren’t comparable, you must pay an ex-
cise tax of 35% of the amount you contributed.

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Qualifying for an Archer MSA Self-only coverage Family coverage
To qualify for an Archer MSA, you must be either of the Minimum annual
following. deductible $2,450 $4,950
Maximum annual
• An employee (or the spouse of an employee) of a deductible $3,700 $7,400
small employer (defined later) that maintains a
self-only or family HDHP for you (or your spouse). Maximum annual
out-of-pocket
• A self-employed person (or the spouse of a self-em- expenses $4,950 $9,050
ployed person) who maintains a self-only or family
HDHP. Family plans that don’t meet the high deductible
rules. There are some family plans that have deducti-
You can have no other health or Medicare coverage ex-
bles for both the family as a whole and for individual family
cept what is permitted under Other health coverage, later.
members. Under these plans, if you meet the individual
You must be an eligible individual on the first day of a
deductible for one family member, you don’t have to meet
given month to get an Archer MSA deduction for that
the higher annual deductible amount for the family. If ei-
month.
ther the deductible for the family as a whole or the deduc-
If another taxpayer is entitled to claim you as a tible for an individual family member is less than the mini-
! dependent, you can’t claim a deduction for an mum annual deductible for family coverage, the plan
CAUTION Archer MSA contribution. This is true even if the doesn’t qualify as an HDHP.
other person doesn’t receive an exemption deduction for
you because the exemption amount is zero for tax years Other health coverage. If you (and your spouse, if you
2018 through 2025. have family coverage) have HDHP coverage, you can’t
generally have any other health coverage. However, you
Small employer. A small employer is generally an em- can still be an eligible individual even if your spouse has
ployer who had an average of 50 or fewer employees dur- non-HDHP coverage, provided you aren’t covered by that
ing either of the last 2 calendar years. The definition of plan. However, you can have additional insurance that
small employer is modified for new employers and grow- provides benefits only for the following items.
ing employers. • Liabilities incurred under workers’ compensation laws,
Growing employer. A small employer may begin torts, or ownership or use of property.
HDHPs and Archer MSAs for its employees and then • A specific disease or illness.
grow beyond 50 employees. The employer will continue to
• A fixed amount per day (or other period) of hospitali-
meet the requirement for small employers if the employer:
zation.
• Had 50 or fewer employees when the Archer MSAs You can also have coverage (whether provided through
began, insurance or otherwise) for the following items.
• Made a contribution that was excludable or deductible Accidents.
•
as an Archer MSA for the last year the employer had
50 or fewer employees, and • Disability.
• Had an average of 200 or fewer employees each year • Dental care.
after 1996. • Vision care.
Changing employers. If you change employers, your • Long-term care.
Archer MSA moves with you. However, you may not make
additional contributions unless you are otherwise eligible. Contributions to an MSA

High deductible health plan (HDHP). To be eligible for Contributions to an Archer MSA must be made in cash.
an Archer MSA, you must be covered under an HDHP. An You can’t contribute stock or other property to an Archer
HDHP has: MSA.
• A higher annual deductible than typical health plans,
and Who can contribute to my Archer MSA? If you are an
employee, your employer may make contributions to your
• A maximum limit on the annual out-of-pocket medical Archer MSA. (You don’t pay tax on these contributions.) If
expenses that you must pay for covered expenses. your employer doesn’t make contributions to your Archer
Limits. The following table shows the limits for annual MSA, or you are self-employed, you can make your own
deductibles and the maximum out-of-pocket expenses for contributions to your Archer MSA. You and your employer
HDHPs for 2022. can’t make contributions to your Archer MSA in the same
year. You don’t have to make contributions to your Archer
MSA every year.

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If your spouse is covered by your HDHP and an self-employment income is $2,500 for the year. Therefore,
! excludable amount is contributed by your spou- you are limited to a contribution of $2,500.
CAUTION se’s employer to an Archer MSA belonging to
your spouse, you can’t make contributions to your own Individuals enrolled in Medicare. Beginning with the
Archer MSA that year. first month you are enrolled in Medicare, you can’t contrib-
ute to an Archer MSA. However, you may be eligible for a
Medicare Advantage MSA, discussed later.
Limits
There are two limits on the amount you or your employer When To Contribute

can contribute to your Archer MSA. You can make contributions to your Archer MSA for 2022
• The annual deductible limit. through April 15, 2023.
• An income limit.
Reporting Contributions on Your Return
Annual deductible limit. You or your employer can
contribute up to 75% of the annual deductible of your Report all contributions to your Archer MSA on Form 8853
HDHP (65% if you have a self-only plan) to your Archer and file it with your Form 1040, 1040-SR, or 1040-NR.
MSA. You must have the HDHP all year to contribute the You should include all contributions you or your employer
full amount. If you don’t qualify to contribute the full made for 2022, including those made from January 1,
amount for the year, determine your annual deductible 2023, through April 15, 2023, that are designated for
limit by using the Line 3 Limitation Chart and Worksheet in 2022.
the Instructions for Form 8853, Archer MSAs and
You should receive Form 5498-SA, HSA, Archer MSA,
Long-Term Care Insurance Contracts.
or Medicare Advantage MSA Information, from the trustee
Example 1. You have an HDHP for your family all showing the amount you or your employer contributed
year in 2022. The annual deductible is $6,000. You can during the year. Your employer’s contributions should be
contribute up to $4,500 ($6,000 × 75% (0.75)) to your shown on Form W-2, box 12, code R. Follow the Instruc-
Archer MSA for the year. tions for Form 8853 and complete the Line 3 Limitation
Chart and Worksheet in the instructions. Report your
Example 2. You have an HDHP for your family for the Archer MSA deduction on Form 1040, 1040-SR, or
entire period of July through December 2022 (6 months). 1040-NR.
The annual deductible is $6,000. You can contribute up to
$2,250 ($6,000 × 75% (0.75) ÷ 12 × 6) to your Archer Excess contributions. You will have excess contribu-
MSA for the year. tions if the contributions to your Archer 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 your employer are included in your gross income. If the
the lower annual deductible of the two health excess contribution isn’t included in Form W-2, box 1, you
plans. The contribution limit is split equally between the must report the excess as “Other income” on your tax re-
two of 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 contributions. See Form 5329, Additional Taxes on Quali-
earned for the year from the employer through whom you fied Plans (Including IRAs) and Other Tax-Favored Ac-
have your HDHP. counts, to figure the excise tax. The excise tax applies to
If you are self-employed, you can’t contribute more each tax year the excess contribution remains in the ac-
than your net self-employment income. This is your in- count.
come from self-employment minus expenses (including You may withdraw some or all of the excess contribu-
the deductible 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 2022. Through TR, you had an HDHP for your family for • You withdraw the excess contributions by the due
the entire year. The annual deductible was $6,000. You date, including extensions, of your tax return.
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 2022. The an- Deducting an excess contribution in a later year.
nual deductible was $6,000. Based on the annual deducti- You may be able to deduct excess contributions for previ-
ble, the maximum contribution to your Archer MSA would ous years that are still in your Archer MSA. The excess
have been $4,500 (75% (0.75) × $6,000). However, after
deducting your business expenses, your net

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contribution you can deduct in the current year is the For this purpose, a child of parents that are di-
lesser of the following two amounts. TIP vorced, separated, or living apart for the last 6
months of the calendar year is treated as the de-
• Your maximum Archer MSA contribution limit for the
pendent of both parents whether or not the custodial pa-
year minus any amounts contributed to your Archer
rent releases the claim to the child’s exemption.
MSA for the year.
• The total excess contributions in your Archer MSA at You can’t deduct qualified medical expenses as
the beginning of the year. ! an itemized deduction on Schedule A (Form
Any excess contributions remaining at the end of a tax CAUTION 1040) that are equal to the tax-free distribution
year are subject to the excise tax. See Form 5329. from your Archer MSA.

Special rules for insurance premiums. Generally,
Distributions From an MSA you can’t treat insurance premiums as qualified medical
expenses for Archer MSAs. You can, however, treat pre-
You will generally pay medical expenses during the year
miums for long-term care coverage, health care coverage
without being reimbursed by your HDHP until you reach
while you receive unemployment benefits, or health care
the annual deductible for the plan. When you pay medical
continuation coverage required under any federal law as
expenses during the year that aren’t reimbursed by your
qualified medical expenses for Archer MSAs.
HDHP, you can ask the trustee of your Archer MSA to
send you a distribution from your Archer MSA. Health coverage tax credit. You can’t claim this
credit for premiums that you pay with a tax-free distribu-
You can receive tax-free distributions from your Archer
tion from your Archer MSA. See Pub. 502 for information
MSA to pay for qualified medical expenses (discussed
on this credit.
later). If you receive distributions for other reasons, the
amount will be subject to income tax and may be subject Deemed distributions from Archer MSAs. The follow-
to an additional 20% tax as well. You don’t have to make ing situations result in deemed taxable distributions from
withdrawals from your Archer MSA each year. your Archer MSA.
If you no longer qualify to make contributions, you • You engaged in any transaction prohibited by section
TIP can still receive tax-free distributions to pay or re- 4975 with respect to any of your Archer MSAs at any
imburse your qualified medical expenses. time in 2022. Your account ceases to be an Archer
MSA as of January 1, 2022, and you must include the
A distribution is money you get from your Archer MSA. fair market value of all assets in the account as of Jan-
The trustee will report any distribution to you and the IRS uary 1, 2022, on Form 8853.
on Form 1099-SA, Distributions From an HSA, Archer
MSA, or Medicare Advantage MSA. • You used any portion of any of your Archer MSAs as
security for a loan at any time in 2022. You must in-
Qualified medical expenses. Qualified medical expen- clude the fair market value of the assets used as se-
ses are those expenses that would generally qualify for curity for the loan as income on Form 1040, 1040-SR,
the medical and dental expenses deduction. These are or 1040-NR.
explained in Pub. 502. Examples of prohibited transactions include the direct
Amounts paid after 2019 for over-the-counter medicine or indirect:
(whether or not prescribed) and menstrual care products
are considered medical care and are considered a cov- • Sale, exchange, or leasing of property between you
ered expense. and the Archer MSA;
Qualified medical expenses are those incurred by the • Lending of money between you and the Archer MSA;
following persons.
• Furnishing goods, services, or facilities between you
1. You and your spouse. and the Archer MSA; and
2. All dependents you claim on your tax return. • Transfer to or use by you, or for your benefit, of any
assets of the Archer MSA.
3. Any person you could have claimed as a dependent
on your return except that: Any deemed distribution won’t be treated as used to
pay qualified medical expenses. These distributions are
a. The person filed a joint return; included in your income and are subject to the additional
b. The person had gross income of $4,400 or more; 20% tax, discussed later.
or
c. You, or your spouse if filing jointly, could be
claimed as a dependent on someone else’s 2022
return.

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Recordkeeping. You must keep records suffi- pay for qualified medical expenses are tax free. Amounts
cient to show that: that remain at the end of the year are generally carried
RECORDS over to the next year (see Excess contributions, earlier).
• The distributions were exclusively to pay or reimburse Earnings on amounts in an Archer MSA aren’t included in
qualified medical expenses, your income while held in the Archer MSA.
• The qualified medical expenses hadn’t been previ-
ously paid or reimbursed from another source, and Death of the Archer MSA Holder
• The medical expenses hadn’t been taken as an item-
You should choose a beneficiary when you set up your
ized deduction in any year.
Archer MSA. What happens to that Archer MSA when you
Don’t send these records with your tax return. Keep them die depends on whom you designate as the beneficiary.
with your tax records.
Spouse is the designated beneficiary. If your spouse
is the designated beneficiary of your Archer MSA, it will be
Reporting Distributions on Your Return treated as your spouse’s Archer MSA after your death.

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

An Archer MSA is generally exempt from tax. You are per- Health plan. If you want your employees to be able to
mitted to take a distribution from your Archer MSA at any have Archer MSAs, you must make an HDHP available to
time; however, only those amounts used exclusively to them. You can provide no additional coverage other than

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those exceptions listed earlier under Other health cover-
age.
Flexible Spending
Contributions. You can make contributions to your em-
ployees’ Archer MSAs and deduct them for the year in Arrangements (FSAs)
which you make them.
A health Flexible Spending Arrangement (FSA) allows
Comparable contributions. If you decide to make con- employees to be reimbursed for medical expenses. FSAs
tributions, you must make comparable contributions to all are usually funded through voluntary salary reduction
comparable participating employees’ Archer MSAs. Your agreements with your employer. No employment or fed-
contributions are comparable if they are either: eral income taxes are deducted from your contribution.
The employer may also contribute.
• The same amount, or
• The same percentage of the annual deductible limit Note. Unlike HSAs or Archer MSAs, which must be
under the HDHP covering the employees. reported on Form 1040, 1040-SR, or 1040-NR, there are
no reporting requirements for FSAs on your income tax re-
Comparable participating employees. Comparable turn.
participating employees:
For information on the interaction between a health
• Are covered by your HDHP and are eligible to estab-
FSA and an HSA, see Other employee health plans under
lish an Archer MSA,
Qualifying for an HSA, earlier.
• Have the same category of coverage (either self-only
or family coverage), and What are the benefits of an FSA? You may enjoy sev-
eral benefits from having an FSA.
• Have the same category of employment (either
part-time or full-time). • Contributions made by your employer can be exclu-
ded from your gross income.
Excise tax. If you made contributions to your employ-
ees’ Archer MSAs that weren’t comparable, you must pay • No employment or federal income taxes are deducted
an excise tax of 35% of the amount you contributed. from the contributions.
• Reimbursements may be tax free if you pay qualified
Employment taxes. Amounts you contribute to your medical expenses. See Qualified medical expenses,
employees’ Archer MSAs aren’t generally subject to em- later.
ployment taxes. You must report the contributions on
Form W-2, box 12, code R. • You can use an FSA to pay qualified medical expen-
ses even if you haven’t yet placed the funds in the ac-
count.
Medicare Advantage MSAs
A Medicare Advantage MSA is an Archer MSA designa- Qualifying for an FSA
ted by Medicare to be used solely to pay the qualified
medical expenses of the account holder. To be eligible for Health FSAs are employer-established benefit plans.
a Medicare Advantage MSA, you must be enrolled in These may be offered in conjunction with other em-
Medicare and have an HDHP that meets the Medicare ployer-provided benefits as part of a cafeteria plan. Em-
guidelines. ployers have flexibility to offer various combinations of
benefits in designing their plans.
A Medicare Advantage MSA is a tax-exempt trust or
custodial savings account that you set up with a financial Self-employed persons aren’t eligible for FSAs.
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.
An HDHP is a special health insurance policy that has a Contributions to an FSA
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
Medicare Advantage MSAs are administered through employer may also contribute to your FSA if specified in
the federal Medicare program. You can get information by the plan.
calling 800-MEDICARE (800-633-4227) or through the In-
ternet at Medicare.gov. You don’t pay federal income tax or employment taxes
on the salary you contribute or the amounts your employer
Note. You must file Form 8853, Archer MSAs and contributes to the FSA. However, contributions made by
Long-Term Care Insurance Contracts, with your tax return your employer to provide coverage for long-term care in-
if you have a Medicare Advantage MSA. surance must be included in income.

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When To Contribute Qualified medical expenses are those incurred by the
following persons.
At the beginning of the plan year, you must designate how 1. You and your spouse.
much you want to contribute. Then, your employer will de-
duct amounts periodically (generally, every payday) in ac- 2. All dependents you claim on your tax return.
cordance with your annual election. You can change or re- 3. Any person you could have claimed as a dependent
voke your election only if specifically allowed by law and on your return except that:
the plan.
a. The person filed a joint return;
Amount of Contribution b. The person had gross income of $4,400 or more;
or
For 2022, salary reduction contributions to a health FSA
can’t be more than $2,850 a year (or any lower amount set c. You, or your spouse if filing jointly, could be
by the plan). This amount is indexed for inflation and may claimed as a dependent on someone else’s 2022
change from year to year. return.
4. Your child under age 27 at the end of your tax year.
Generally, contributed amounts that aren’t spent by the
end of the plan year are forfeited. However, see Balance You can’t receive distributions from your FSA for the
in an FSA, later, for possible exceptions. For this reason, it following expenses.
is important to base your contribution on an estimate of • Amounts paid for health insurance premiums.
the qualifying expenses you will have during the year.
• Amounts paid for long-term care coverage or expen-
ses.
Distributions From an FSA
• Amounts that are covered under another health plan.
Generally, distributions from a health FSA must be paid If you are covered under both a health FSA and an HRA,
only to reimburse you for qualified medical expenses you see Notice 2002-45, Part V, 2002-28 I.R.B. 93, available
incurred during the period of coverage. You must be able at IRS.gov/pub/irs-drop/n-02-45.pdf.
to receive the maximum amount of reimbursement (the
You can’t deduct qualified medical expenses as
amount you have elected to contribute for the year) at any
an itemized deduction on Schedule A (Form
time during the coverage period, regardless of the amount CAUTION!
1040) that are equal to the reimbursement you re-
you have actually contributed. The maximum amount you
ceive from the FSA.
can receive tax free is the total amount you elected to con-
tribute to the health FSA for the year.
Qualified reservist distribution. A special rule allows
You must provide the health FSA with a written state- amounts in a health FSA to be distributed to reservists or-
ment from an independent third party stating that the med- dered or called to active duty. This rule applies to distribu-
ical expense has been incurred and the amount of the ex- tions made after June 17, 2008, if the plan has been
pense. You must also provide a written statement that the amended to allow these distributions. Your employer must
expense hasn’t been paid or reimbursed under any other report the distribution as wages on your Form W-2 for the
health plan coverage. The FSA can’t make advance reim- year in which the distribution is made. The distribution is
bursements of future or projected expenses. subject to employment taxes and is included in your gross
income.
Debit cards, credit cards, and stored value cards given A qualified reservist distribution is allowed if you were
to you by your employer can be used to reimburse partici- (because you were in the reserves) ordered or called to
pants in a health FSA. If the use of these cards meets cer- active duty for a period of more than 179 days or for an in-
tain substantiation methods, you may not have to provide definite period, and the distribution is made during the pe-
additional information to the health FSA. For information riod beginning on the date of the order or call and ending
on these methods, see Revenue Ruling 2003-43, 2003-21 on the last date that reimbursements could otherwise be
I.R.B. 935, available at IRS.gov/pub/irs-drop/rr-03-43.pdf; made for the plan year that includes the date of the order
Notice 2006-69, 2006-31 I.R.B. 107, available at or call.
IRS.gov/irb/2006-31_IRB/ar10.html; and Notice 2007-2,
2007-2 I.R.B. 254, available at IRS.gov/irb/2007-2_IRB/
ar09.html. Balance in an FSA

Qualified medical expenses. Qualified medical expen- FSAs are generally "use-it-or-lose-it" plans. This means
ses are those specified in the plan that would generally that amounts in the account at the end of the plan year
qualify for the medical and dental expenses deduction. can't generally be carried over to the next year. However,
These are explained in Pub. 502. the plan can provide for either a grace period or a carry-
Expenses incurred after December 31, 2019, for over.
over-the-counter medicine (whether or not prescribed) The plan can provide for a grace period of up to 2 1/2
and menstrual care products are considered medical care months after the end of the plan year. If there is a grace
and are considered a covered expense. period, any qualified medical expenses incurred in that

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period can be paid from any amounts left in the account at Qualifying for an HRA
the end of the previous year. Your employer isn't permit-
ted to refund any part of the balance to you. See Qualified HRAs are employer-established benefit plans. These may
reservist distributions, earlier. be offered in conjunction with other employer-provided
health benefits. Employers have complete flexibility to of-
Plans may allow up to $570 of unused amounts remain- fer various combinations of benefits in designing their
ing at the end of the plan year to be paid or reimbursed for plans.
qualified medical expenses you incur in the following plan
year. The plan may specify a lower dollar amount as the Self-employed persons aren’t eligible for HRAs.
maximum carryover amount. If the plan permits a carry- Certain limitations may apply if you are a highly
over, any unused amounts in excess of the carryover ! compensated participant.
amount are forfeited. The carryover doesn't affect the CAUTION
maximum amount of salary reduction contributions that
you care permitted to make.
Contributions to an HRA
A plan may allow either the grace period or a carryover,
but it may not allow both. HRAs are funded solely through employer contributions
and may not be funded through employee salary reduc-
tions under a cafeteria plan. These contributions aren’t in-
Employer Participation cluded in the employee’s income. You don’t pay federal
income tax or employment taxes on amounts your em-
For the health FSA to maintain tax-qualified status, em- ployer contributes to the HRA.
ployers must comply with certain requirements that apply
to cafeteria plans. For example, there are restrictions for Amount of Contribution
plans that cover highly compensated employees and key
employees. The plans must also comply with rules appli- There is no limit on the amount of money your employer
cable to other accident and health plans. Pub. 15-B, Em- can contribute to the accounts. Additionally, the maximum
ployer’s Tax Guide to Fringe Benefits, explains these re- reimbursement amount credited under the HRA in the fu-
quirements. ture may be increased or decreased by amounts not pre-
viously used. See Balance in an HRA, later.

Health Reimbursement Distributions From an HRA

Arrangements (HRAs) Generally, distributions from an HRA must be paid to re-
imburse you for qualified medical expenses you have in-
A Health Reimbursement Arrangement (HRA) must be curred. The expense must have been incurred on or after
funded solely by an employer. The contribution can’t be the date you are enrolled in the HRA.
paid through a voluntary salary reduction agreement on
Debit cards, credit cards, and stored value cards given
the part of an employee. Employees are reimbursed tax
to you by your employer can be used to reimburse partici-
free for qualified medical expenses up to a maximum dol-
pants in an HRA. If the use of these cards meets certain
lar amount for a coverage period. An HRA may be offered
substantiation methods, you may not have to provide ad-
with other health plans, including FSAs.
ditional 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/2007-2_IRB/ar09.html.
For information on the interaction between an HRA and If any distribution is, or can be, made for other than the
an HSA, see Other employee health plans under Qualify- reimbursement of qualified medical expenses, any distri-
ing for an HSA, earlier. 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

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spouse or dependents), any distribution from the HRA is            Employer Participation
included in income.
                                                                   For  an  HRA  to  maintain  tax-qualified  status,  employers 
Reimbursements  under  an  HRA  can  be  made  to  the 
                                                                   must comply with certain requirements that apply to other 
following persons.
                                                                   accident  and  health  plans.  Pub.  15-B,  Employer’s  Tax 
1. Current and former employees.                                   Guide to Fringe Benefits, explains these requirements.
2. Spouses and dependents of those employees.
3. Any person you could have claimed as a dependent 
                                                                   How To Get Tax Help
  on your return except that:
  a. The person filed a joint return;                              If you have questions about a tax issue; need help prepar-
                                                                   ing your tax return; or want to download free publications, 
  b. The person had gross income of $4,400 or more;                forms, or instructions, go to IRS.gov to find resources that 
        or                                                         can help you right away.
  c. You, or your spouse if filing jointly, could be 
        claimed as a dependent on someone else’s 2022              Preparing and filing your tax return.  After receiving all 
        return.                                                    your wage and earnings statements (Forms W-2, W-2G, 
                                                                   1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment 
4. Your child under age 27 at the end of your tax year.            compensation statements (by mail or in a digital format) or 
                                                                   other  government  payment  statements  (Form  1099-G); 
5. Spouses and dependents of deceased employees.
                                                                   and  interest,  dividend,  and  retirement  statements  from 
        For  this  purpose,  a  child  of  parents  that  are  di- banks and investment firms (Forms 1099), you have sev-
TIP     vorced,  separated,  or  living  apart  for  the  last  6  eral options to choose from to prepare and file your tax re-
        months of the calendar year is treated as the de-          turn.  You  can  prepare  the  tax  return  yourself,  see  if  you 
pendent of both parents whether or not the custodial pa-           qualify for free tax preparation, or hire a tax professional to 
rent releases the claim to the child’s exemption.                  prepare your return.

Qualified medical expenses.  Qualified medical expen-              Free options for tax preparation.    Go to IRS.gov to see 
ses  are  those  specified  in  the  plan  that  would  generally  your options for preparing and filing your return online or 
qualify  for  the  medical  and  dental  expenses  deduction.      in your local community, if you qualify, which include the 
These are explained in Pub. 502.                                   following.
Expenses  incurred  after  December  31,  2019,  for               • Free File. This program lets you prepare and file your 
over-the-counter  medicine  (whether  or  nor  prescribed)           federal individual income tax return for free using 
and menstrual care products are considered medical care              brand-name tax-preparation-and-filing software or 
and are considered a covered expense.                                Free File fillable forms. However, state tax preparation 
Qualified medical expenses from your HRA include the                 may not be available through Free File. Go to IRS.gov/
following.                                                           FreeFile to see if you qualify for free online federal tax 
• Amounts paid for health insurance premiums.                        preparation, e-filing, and direct deposit or payment op-
                                                                     tions.
• Amounts paid for long-term care coverage.
                                                                   • VITA. The Volunteer Income Tax Assistance (VITA) 
• Amounts that aren’t covered under another health                   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 
                                                                     800-906-9887 for information on free tax return prepa-
        You  can’t  deduct  qualified  medical  expenses  as         ration.
!       an  itemized  deduction  on  Schedule  A  (Form              TCE. The Tax Counseling for the Elderly (TCE) pro-
CAUTION 1040)  that  are  equal  to  the  distribution  from  the  •
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. 
                                                                     Go to IRS.gov/TCE, download the free IRS2Go app, 
Amounts that remain at the end of the year can generally             or call 888-227-7669 for information on free tax return 
be carried over to the next year. Your employer isn’t per-           preparation.
mitted  to  refund  any  part  of  the  balance  to  you.  These 
amounts may never be used for anything but reimburse-              • MilTax. Members of the U.S. Armed Forces and 
ments for qualified medical expenses.                                qualified veterans may use MilTax, a free tax service 
                                                                     offered by the Department of Defense through Military 

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OneSource. For more information, go to should have a thorough understanding of tax matters. For
MilitaryOneSource MilitaryOneSource.mil/MilTax ( ). more information on how to choose a tax preparer, go to
Also, the IRS offers Free Fillable Forms, which can Tips for Choosing a Tax Preparer on IRS.gov.
be completed online and then filed electronically re-
gardless of income. Coronavirus. Go to IRS.gov/Coronavirus for links to in-
formation on the impact of the coronavirus, as well as tax
Using online tools to help prepare your return. Go to relief available for individuals and families, small and large
IRS.gov/Tools for the following. businesses, and tax-exempt organizations.

• The Earned Income Tax Credit Assistant IRS.gov/ ( Employers can register to use Business Services On-
EITCAssistant) determines if you’re eligible for the line. The Social Security Administration (SSA) offers on-
earned income credit (EIC). line service at SSA.gov/employer for fast, free, and secure
• The Online EIN Application IRS.gov/EIN ( ) helps you online W-2 filing options to CPAs, accountants, enrolled
get an employer identification number (EIN) at no agents, and individuals who process Form W-2, Wage
cost. and Tax Statement, and Form W-2c, Corrected Wage and
Tax Statement.
• The Tax Withholding Estimator IRS.gov/W4app ( )
makes it easier for you to estimate the federal income IRS social media. Go to IRS.gov/SocialMedia to see the
tax you want your employer to withhold from your pay- various social media tools the IRS uses to share the latest
check. This is tax withholding. See how your withhold- information on tax changes, scam alerts, initiatives, prod-
ing affects your refund, take-home pay, or tax due. ucts, and services. At the IRS, privacy and security are
• The First-Time Homebuyer Credit Account Look-up our highest priority. We use these tools to share public in-
(IRS.gov/HomeBuyer) tool provides information on formation with you. Don’t post your social security number
your repayments and account balance. (SSN) or other confidential information on social media
sites. Always protect your identity when using any social
• The Sales Tax Deduction Calculator IRS.gov/ ( networking site.
SalesTax) figures the amount you can claim if you The following IRS YouTube channels provide short, in-
itemize deductions on Schedule A (Form 1040). formative videos on various tax-related topics in English,
Getting answers to your tax questions. On Spanish, and ASL.
IRS.gov, you can get up-to-date information on Youtube.com/irsvideos.
•
current events and changes in tax law.
• Youtube.com/irsvideosmultilingua.
• IRS.gov/Help: A variety of tools to help you get an-
swers to some of the most common tax questions. • Youtube.com/irsvideosASL.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that Watching IRS videos. The IRS Video portal
will ask you questions and, based on your input, pro- (IRSVideos.gov) contains video and audio presentations
vide answers on a number of tax law topics. for individuals, small businesses, and tax professionals.
• IRS.gov/Forms: Find forms, instructions, and publica-
Online tax information in other languages. You can
tions. You will find details on the most recent tax
find information on IRS.gov/MyLanguage if English isn’t
changes and interactive links to help you find answers
your native language.
to your questions.
• You may also be able to access tax law information in Free Over-the-Phone Interpreter (OPI) Service. The
your electronic filing software. IRS is committed to serving our multilingual customers by
offering OPI services. The OPI Service is a federally fun-
ded program and is available at Taxpayer Assistance
Need someone to prepare your tax return? There are Centers (TACs), other IRS offices, and every VITA/TCE
various types of tax return preparers, including enrolled return site. The OPI Service is accessible in more than
agents, certified public accountants (CPAs), accountants, 350 languages.
and many others who don’t have professional credentials.
If you choose to have someone prepare your tax return, Accessibility Helpline available for taxpayers with
choose that preparer wisely. A paid tax preparer is: disabilities. Taxpayers who need information about ac-
• Primarily responsible for the overall substantive accu- cessibility services can call 833-690-0598. The Accessi-
racy of your return, bility Helpline can answer questions related to current and
future accessibility products and services available in al-
• Required to sign the return, and ternative media formats (for example, braille, large print,
• Required to include their preparer tax identification audio, etc.). The Accessibility Helpline does not have ac-
number (PTIN). cess to your IRS account. For help with tax law, refunds,
or account-related issues, go to IRS.gov/LetUsHelp.
Although the tax preparer always signs the return,
you're ultimately responsible for providing all the informa-
tion required for the preparer to accurately prepare your
return. Anyone paid to prepare tax returns for others

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Note. Form 9000, Alternative Media Preference, or 10 taxpayers use direct deposit to receive their refunds. If
Form 9000(SP) allows you to elect to receive certain types you don’t have a bank account, go to IRS.gov/
of written correspondence in the following formats. DirectDeposit for more information on where to find a
• Standard Print. bank or credit union that can open an account online.

• Large Print. Getting a transcript of your return. The quickest way
• Braille. to get a copy of your tax transcript is to go to IRS.gov/
Transcripts. Click on either “Get Transcript Online” or “Get
• Audio (MP3). Transcript by Mail” to order a free copy of your transcript.
• Plain Text File (TXT). If you prefer, you can order your transcript by calling
800-908-9946.
• Braille Ready File (BRF).
Reporting and resolving your tax-related identity
Disasters. Go to Disaster Assistance and Emergency
theft issues.
Relief for Individuals and Businesses to review the availa-
ble disaster tax relief. • Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.
Getting tax forms and publications. Go to IRS.gov/ Your taxes can be affected if your SSN is used to file a
Forms to view, download, or print all the forms, instruc- fraudulent return or to claim a refund or credit.
tions, and publications you may need. Or, you can go to
IRS.gov/OrderForms to place an order. • The IRS doesn’t initiate contact with taxpayers by
email, text messages (including shortened links), tele-
Getting tax publications and instructions in eBook phone calls, or social media channels to request or
format. You can also download and view popular tax verify personal or financial information. This includes
publications and instructions (including the Instructions for requests for personal identification numbers (PINs),
Form 1040) on mobile devices as eBooks at IRS.gov/ passwords, or similar information for credit cards,
eBooks. banks, or other financial accounts.
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft
Note. IRS eBooks have been tested using Apple's Central webpage, for information on identity theft and
iBooks for iPad. Our eBooks haven’t been tested on other data security protection for taxpayers, tax professio-
dedicated eBook readers, and eBook functionality may nals, and businesses. If your SSN has been lost or
not operate as intended. stolen or you suspect you’re a victim of tax-related
Access your online account (individual taxpayers identity theft, you can learn what steps you should
only). Go to IRS.gov/Account to securely access infor- take.
mation about your federal tax account. • Get an Identity Protection PIN (IP PIN). IP PINs are
• View the amount you owe and a breakdown by tax six-digit numbers assigned to taxpayers to help pre-
year. vent the misuse of their SSNs on fraudulent federal in-
come tax returns. When you have an IP PIN, it pre-
• See payment plan details or apply for a new payment vents someone else from filing a tax return with your
plan. SSN. To learn more, go to IRS.gov/IPPIN.
• Make a payment or view 5 years of payment history
and any pending or scheduled payments. Ways to check on the status of your refund.
• Access your tax records, including key data from your • Go to IRS.gov/Refunds.
most recent tax return, and transcripts. • Download the official IRS2Go app to your mobile de-
• View digital copies of select notices from the IRS. vice to check your refund status.
• Approve or reject authorization requests from tax pro- • Call the automated refund hotline at 800-829-1954.
fessionals.
Note. The IRS can’t issue refunds before mid-Febru-
• View your address on file or manage your communi- ary for returns that claimed the EIC or the additional child
cation preferences. tax credit (ACTC). This applies to the entire refund, not
just the portion associated with these credits.
Tax Pro Account. This tool lets your tax professional
submit an authorization request to access your individual Making a tax payment. Go to IRS.gov/Payments for in-
taxpayer IRS online account. For more information, go to formation on how to make a payment using any of the fol-
IRS.gov/TaxProAccount. lowing options.
Using direct deposit. The fastest way to receive a tax • IRS Direct Pay: Pay your individual tax bill or estima-
refund is to file electronically and choose direct deposit, ted tax payment directly from your checking or sav-
which securely and electronically transfers your refund di- ings account at no cost to you.
rectly into your financial account. Direct deposit also • Debit or Credit Card: Choose an approved payment
avoids the possibility that your check could be lost, stolen, processor to pay online or by phone.
destroyed, or returned undeliverable to the IRS. Eight in

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• Electronic Funds Withdrawal: Schedule a payment Contacting your local IRS office. Keep in mind, many
when filing your federal taxes using tax return prepara- questions can be answered on IRS.gov without visiting an
tion software or through a tax professional. IRS TAC. Go to IRS.gov/LetUsHelp for the topics people
ask about most. If you still need help, IRS TACs provide
• Electronic Federal Tax Payment System: Best option
tax help when a tax issue can’t be handled online or by
for businesses. Enrollment is required.
phone. All TACs now provide service by appointment, so
• Check or Money Order: Mail your payment to the ad- you’ll know in advance that you can get the service you
dress listed on the notice or instructions. need without long wait times. Before you visit, go to
• Cash: You may be able to pay your taxes with cash at IRS.gov/TACLocator to find the nearest TAC and to check
a participating retail store. hours, available services, and appointment options. Or,
on the IRS2Go app, under the Stay Connected tab,
• Same-Day Wire: You may be able to do same-day choose the Contact Us option and click on “Local Offices.”
wire from your financial institution. Contact your finan-
cial institution for availability, cost, and time frames.
The Taxpayer Advocate Service (TAS)
Note. The IRS uses the latest encryption technology Is Here To Help You
to ensure that the electronic payments you make online,
by phone, or from a mobile device using the IRS2Go app What Is TAS?
are safe and secure. Paying electronically is quick, easy,
TAS is an independent organization within the IRS that
and faster than mailing in a check or money order.
helps taxpayers and protects taxpayer rights. Their job is
What if I can’t pay now? Go to IRS.gov/Payments for to ensure that every taxpayer is treated fairly and that you
more information about your options. know and understand your rights under the Taxpayer Bill
of Rights.
• Apply for an online payment agreement IRS.gov/ (
OPA) to meet your tax obligation in monthly install-
How Can You Learn About Your Taxpayer
ments if you can’t pay your taxes in full today. Once
you complete the online process, you will receive im- Rights?

mediate notification of whether your agreement has The Taxpayer Bill of Rights describes 10 basic rights that
been approved. all taxpayers have when dealing with the IRS. Go to
• Use the Offer in Compromise Pre-Qualifier to see if TaxpayerAdvocate.IRS.gov to help you understand what
you can settle your tax debt for less than the full these rights mean to you and how they apply. These are
amount you owe. For more information on the Offer in your rights. Know them. Use them.
Compromise program, go to IRS.gov/OIC.
What Can TAS Do for You?
Filing an amended return. Go to IRS.gov/Form1040X
for information and updates. TAS can help you resolve problems that you can’t resolve
with the IRS. And their service is free. If you qualify for
Checking the status of your amended return. Go to their assistance, you will be assigned to one advocate
IRS.gov/WMAR to track the status of Form 1040-X amen- who will work with you throughout the process and will do
ded returns. everything possible to resolve your issue. TAS can help
you if:
Note. It can take up to 3 weeks from the date you filed
your amended return for it to show up in our system, and • Your problem is causing financial difficulty for you,
processing it can take up to 16 weeks. your family, or your business;
Understanding an IRS notice or letter you’ve re- • You face (or your business is facing) an immediate
ceived. Go to IRS.gov/Notices to find additional informa- threat of adverse action; or
tion about responding to an IRS notice or letter. • 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 TAS has offices in every state, the District of Columbia,
the requested language. The IRS’s commitment to LEP and Puerto Rico. Your local advocate’s number is in your
taxpayers is part of a multi-year timeline that is scheduled local directory and at TaxpayerAdvocate.IRS.gov/
to begin providing translations in 2023. You will continue Contact-Us. You can also call them at 877-777-4778.
to receive communications, including notices and letters
in English until they are translated to your preferred lan-
guage.

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How Else Does TAS Help Taxpayers? to resolve tax problems with the IRS, such as audits, ap-
peals, and tax collection disputes. In addition, LITCs can
TAS works to resolve large-scale problems that affect provide information about taxpayer rights and responsibili-
many taxpayers. If you know of one of these broad issues, ties in different languages for individuals who speak Eng-
report it to them at IRS.gov/SAMS. lish as a second language. Services are offered for free or
a small fee for eligible taxpayers. To find an LITC near
TAS for Tax Professionals you, go to TaxpayerAdvocate.IRS.gov/about-us/Low-
Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low
TAS can provide a variety of information for tax professio- Income Taxpayer Clinic List.
nals, including tax law updates and guidance, TAS pro-
grams, and ways to let TAS know about systemic prob-
lems you’ve seen in your practice.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent in-
dividuals whose income is below a certain level and need

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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 16-       Distributions from 17                           Medical expenses, qualified                    9 14, , 
Assistance (See Tax help) Grace period   17                                17 19, 
                          Qualifying for 16                               Medical savings accounts                       11 16-
C                         When to contribute 17                            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 14
  HSA 5                   8853  15                                         Medicare Advantage MSAs                       16
  MSA 12                  8889  8 10,                                      Qualifying for 12
                                                                           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 17                  Contributions to 18
  HRA 18                  Distributions from 18                           Q
  HSA 9                   Qualifying for 18                               Qualified HSA funding 
  MSA 14                  Health savings accounts 3 11-                    distribution 7
                          Balance in  10
E                         Contributions to 5                              T
Employer participation:   Deemed distributions  9                         Tax help 19
  FSA 18                  Distributions from 9                            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 8
F                         S corporations  8
Flexible spending         When to contribute 8
  arrangements  16 18-    High deductible health plan               4 12, 

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