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Idaho Medical Savings Account Contributions

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Idaho Medical Savings Account Contributions


Medical Savings Account Contributions

An Idaho Medical Savings Account (MSA) allows you to save for medical expenses and nursing home costs while reducing the amount of Idaho income tax you owe. Contributions to a federal MSA do not qualify for this Idaho deduction.

To qualify as an MSA the financial institution must include the words Medical Savings Account or MSA on the statement provided to the account holder and in either the name, title, description, or designation of the account. This account is used exclusively to pay eligible medical, vision and dental expenses (as defined by the Internal Revenue Code), as well as health insurance premiums, supplemental Medicare premiums and long-term care.

Contributions to an MSA may be deducted from your adjusted gross income when you file an Idaho income tax return. You may contribute up to $2,000 each year. If you are married and file a joint income tax return, you may contribute up to $4,000. Interest earned on your account is also deductible. These deductions can be taken only on your Idaho income tax return; they do not apply to federal returns. Reimbursements that are redeposited into the MSA are not considered contributions to the MSA.

You must pay tax on any funds you withdraw from the account to pay for something other than eligible medical expenses. Also, if you are less than 59╜ years of age, funds withdrawn to pay for something other than eligible medical expenses are subject to a 10% penalty.

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Article Details
Views: 983 Created on: Jun 15, 2013
Date updated: Aug 14, 2015
Posted in: STATES, Idaho

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