You report the additional tax in the Other Taxes section of your Form 1040. Exceptions to the additional tax. There is no additional tax if you are disabled, age 65 or older, or die during the year. Death of the Archer MSA holder. What happens to that Archer MSA when you die depends on whom you designate as the beneficiary.
Spouse is the designated beneficiary.
If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. Spouse is not the designated beneficiary. No designated beneficiary. If you have no beneficiary, the fair market value of the Archer MSA will be included on your final income tax return after your death. Examples include amounts paid for doctors' fees, prescription medicines, and necessary hospital services.