Federal Form 5305-C (Health Savings Custodial Account) (2024)

Health Savings Custodial Account
Form 5305-C (Rev. October 2016)
Form5305-C(Rev. October 2016)Department of the TreasuryInternal Revenue ServiceHealth Savings Custodial AccountDo not filewith the InternalRevenue Service(Under section 223(a) of the Internal Revenue Code)Name of account ownerDate of birth of account ownerAddress of account owner (Street address, city, state, ZIP code)Name of custodianAddress or principal place of business of custodianThe account owner named above is establishing this health savings account (HSA) exclusively for the purpose of paying or reimbursing qualifiedmedical expenses of the account owner, his or her spouse, and dependents. The account owner represents that, unless this account is used solely tomake rollover contributions, he or she is eligible to contribute to this HSA; specifically, that he or she: (1) is covered under a high deductible health plan(HDHP); (2) is not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing preventive care and limitedtypes of permitted insurance and permitted coverage); (3) is not enrolled in Medicare; and (4) cannot be claimed as a dependent on another person’stax return.$dollars in cash is assigned to this custodial account.The account owner and the custodian make the following agreement:Article I1. The custodian will accept additional cash contributions for the tax year made by the account owner or on behalf of the account owner (by anemployer, family member, or any other person). No contributions will be accepted by the custodian for any account owner that exceeds themaximum amount for family coverage plus the catch-up contribution.2. Contributions for any tax year may be made at any time before the deadline for filing the account owner’s federal income tax return for that year(without extensions).3. Rollover contributions from an HSA or an Archer Medical Savings Account (Archer MSA) (unless prohibited under this agreement) need not be incash and are not subject to the maximum annual contribution limit set forth in Article II.4. Qualified HSA distributions from a health flexible spending arrangement or health reimbursem*nt arrangement must be completed in atrustee-to-trustee transfer and are not subject to the maximum annual contribution limit set forth in Article II.5. Qualified HSA funding distributions from an individual retirement account must be completed in a trustee-to-trustee transfer and are subject tothe maximum annual contribution limit set forth in Article II.Article II1. For calendar year 2011, the maximum annual contribution limit for an account owner with single coverage is $3,050. This amount increases to$3,100 in 2012. For calendar year 2011, the maximum annual contribution limit for an account owner with family coverage is $6,150. Thisamount increases to $6,250 in 2012. These limits are subject to cost-of-living adjustments after 2012.2. Contributions to Archer MSAs or other HSAs count toward the maximum annual contribution limit to this HSA.3. For calendar year 2009 and later years, an additional $1,000 catch-up contribution may be made for an account owner who is at least age 55 orolder and not enrolled in Medicare.4. Contributions in excess of the maximum annual contribution limit are subject to an excise tax. However, the catch-up contributions are notsubject to an excise tax.Article IIIIt is the responsibility of the account owner to determine whether contributions to this HSA have exceeded the maximum annual contribution limitdescribed in Article II. If contributions to this HSA exceed the maximum annual contribution limit, the account owner shall notify the custodian thatthere exist excess contributions to the HSA. It is the responsibility of the account owner to request the withdrawal of the excess contribution and anynet income attributable to such excess contribution.Article IVThe account owner’s interest in the balance in this custodial account is nonforfeitable.Article V1. No part of the custodial funds in this account may be invested in life insurance contracts or in collectibles as defined in section 408(m).2. The assets of this account may not be commingled with other property except in a common trust fund or common investment fund.3. Neither the account owner nor the custodian will engage in any prohibited transaction with respect to this account (such as borrowing orpledging the account or engaging in any other prohibited transaction as defined in section 4975).Article VI1. Distributions of funds from this HSA may be made upon the direction of the account owner.2. Distributions from this HSA that are used exclusively to pay or reimburse qualified medical expenses of the account owner, his or her spouse, ordependents are tax-free. However, distributions that are not used for qualified medical expenses are included in the account owner’s grossincome and are subject to an additional 20 percent tax on that amount. The additional 20 percent tax does not apply if the distribution is madeafter the account owner’s death, disability, or reaching age 65.3. The custodian is not required to determine whether the distribution is for the payment or reimbursem*nt of qualified medical expenses. Only theaccount owner is responsible for substantiating that the distribution is for qualified medical expenses and must maintain records sufficient toshow, if required, that the distribution is tax-free.Cat. No. 38257XForm5305-C(Rev. 10-2016)Form 5305-C (Rev. 10-2016)Page2Article VIIIf the account owner dies before the entire interest in the account is distributed, the entire account will be disposed of as follows:1. If the beneficiary is the account owner’s spouse, the HSA will become the spouse’s HSA as of the date of death.2. If the beneficiary is not the account owner’s spouse, the HSA will cease to be an HSA as of the date of death. If the beneficiary is the accountowner’s estate, the fair market value of the account as of the date of death is taxable on the account owner’s final return. For other beneficiaries,the fair market value of the account is taxable to that person in the tax year that includes such date.Article VIII1. The account owner agrees to provide the custodian with information necessary for the custodian to prepare any report or return required by theIRS.2. The custodian agrees to prepare and submit any report or return as prescribed by the IRS.Article IXNotwithstanding any other article that may be added or incorporated in this agreement, the provisions of Articles I through VIII and this sentence arecontrolling. Any additional article in this agreement that is inconsistent with section 223 or IRS published guidance will be void.Article XThis agreement will be amended from time to time to comply with the provisions of the Code or IRS published guidance. Other amendments may bemade with the consent of the persons whose signatures appear below.Article XIArticle XI may be used for any additional provisions. If no other provisions will be added, draw a line through this space. If provisions are added, theymust comply with the requirements of Article IX.Account owner’s signatureDateCustodian’s signatureDateWitness’ signature(Use only if signature of account owner or custodian is required to be witnessed.)What's NewDefinitionsAdditional Tax Increased. For tax yearsbeginning after December 31, 2010, theadditional tax on distributions not used forqualified medical expenses increases from10% to 20%.Identifying Number. The account owner’ssocial security number will serve as theidentification number of this HSA. For marriedpersons, each spouse who is eligible to openan HSA and wants to contribute to an HSAmust establish his or her own account. Anemployer identification number (EIN) isrequired for an HSA for which a return is filedto report unrelated business taxable income.An EIN is also required for a common fundcreated for HSAs.General InstructionsSection references are to the Internal RevenueCode.Purpose of FormForm 5305-C is a model custodial accountagreement that has been approved by theIRS. An HSA is established after the form isfully executed by both the account owner andthe custodian. The form can be completed atany time during the tax year. This accountmust be created in the United States for theexclusive benefit of the account owner.Do not file Form 5305-C with the IRS.Instead, keep it with your records. For moreinformation on HSAs, see Notice 2004-2,2004-2 I.R.B. 269, Notice 2004-50, 2004-33I.R.B. 196, Pub. 969, Health SavingsAccounts and Other Tax-Favored HealthPlans, and other IRS published guidance.High Deductible Health Plan (HDHP). Forcalendar year 2011, an HDHP for self-onlycoverage has a minimum annual deductible of$1,200 and an annual out-of-pocketmaximum (deductibles, co-payments andother amounts, but not premiums) of $5,950.In 2012, the $1,200 minimum annualdeductible remains the same and the annualout-of-pocket maximum increases to $6,050.For calendar year 2011, an HDHP for familycoverage has a minimum annual deductible of$2,400 and an annual out-of-pocketmaximum of $11,900. In 2012, the $2,400minimum annual deductible remains the sameand the annual out-of-pocket maximumincreases to $12,100. These limits are subjectto cost-of-living adjustments after 2012.Self-only coverage and family coverageunder an HDHP. Family coverage meanscoverage that is not self-only coverage.Qualified medical expenses. Qualifiedmedical expenses are amounts paid formedical care as defined in section 213(d) forthe account owner, his or her spouse, ordependents (as defined in section 152) butonly to the extent that such amounts are notcompensated for by insurance or otherwise.With certain exceptions, health insurancepremiums are not qualified medical expenses.Custodian. A custodian of an HSA must be abank, an insurance company, a personpreviously approved by the IRS to be acustodian of an individual retirement account(IRA) or Archer MSA, or any other personapproved by the IRS.Specific InstructionsArticle XI. Article XI and any that follow itmay incorporate additional provisions that areagreed to by the account owner andcustodian. The additional provisions mayinclude, for example, definitions, restrictionson rollover contributions from HSAs or ArcherMSAs (requiring a rollover not later than 60days after receipt of a distribution and limitedto one rollover during a one-year period),investment powers, voting rights, exculpatoryprovisions, amendment and termination,removal of custodian, custodian’s fees, statelaw requirements, treatment of excesscontributions, distribution procedures(including frequency or minimum dollaramount), use of debit, credit, or stored-valuecards, return of mistaken distributions, anddescriptions of prohibited transactions. Attachadditional pages if necessary.Form5305-C(Rev. 10-2016)

Extracted from PDF file 2023-federal-form-5305-c.pdf, last modified October 2016

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