When we receive money into your HSA, we also want to know what kind of transaction it is. The IRS sets limits each year on how much you can contribute, and we want to keep track of how close you’re getting to the limit. This also helps us correctly prepare your tax documents.
When you choose the type of transfer in your Forma HSA details page, you’ll see 6 options:
Individual contribution (current year)
Contributions you’re making individually outside of your paycheck that count toward this year's IRS limit. If you’re making a contribution before the tax deadline, you can choose whether you want it to count for the current year or the previous year. For more information on how to do this, refer to the article How do I deposit money into my HSA?
After the tax deadline, contributions will only count toward the current year's limit.
Individual contribution (previous year)
Contributions you’re making individually outside of your paycheck that count toward last year's IRS limit. If you’re making a contribution before the tax deadline, you can choose whether you want it to count for the current year or the previous year.
You can only choose this option if the contribution is before the tax deadline. After that, all individual contributions will count toward the current year's limit.
Transfer from an external HSA
This is when you transfer the balance of an HSA you had with a different custodian, and consolidate all your HSA money in one place. Because it’s money that was already contributed, it doesn’t count toward the limit.
This is similar to transferring money from an external HSA, except instead of it being moved by your previous custodian, you withdrew the HSA balance into a personal account and are now depositing it into your current HSA. If you are rolling over your HSA funds from your personal account, complete the HSA Rollover Contribution Form and mail the form and a check to Forma. We will help you label the transaction once the funds are rolled over.
- This is not considered a contribution so it does not count toward the current year's limit, but it will be reported separately on your 5498-SA form. HSA rollover is only allowed once every 12 months.
- If you do not deposit your rollover funds within 60 days of withdrawal, you may face tax penalties.
Returning money taken out by mistake
This is when you return money to your HSA that was taken out by mistake — usually to pay for a medical expense that wasn’t eligible, or if you tried to withdraw more than your HSA balance. This isn’t considered a contribution so it doesn’t count toward the current year's limit.
If you don’t return the money to your HSA, it will be counted as taxable income and you might face other tax penalties.
These are small transactions that don’t count as taxable contributions toward the HSA contribution limit. Often these include small deposits made by banks or other financial institutions used to verify your account (sometimes called “micro-deposits”.