![]() ![]() To the extent allowed under Code § 162( l) as currently in effect, self -employed persons may deduct from Massachusetts gross income amounts paid during the taxable year for health insurance for: Go to TIR 07-4: Issues Concerning the Tax Relief and Health Care Act of 2006. For tax years prior to 2022, the Massachusetts tax benefits generally applied to Archer MSAs established before 2006. ![]() Massachusetts adopts the federal treatment of the earnings in an Archer MSA account and, as a result, such earnings accrue on a tax-free basis.īeginning with tax year 2022, the Massachusetts tax benefits described in this section generally apply to Archer MSAs established before 2008. Go to IRS Publication 969 (2022), Health Savings Accounts and Other Tax-Favored Health Plans and IRS Publication 502 (2022), Medical and Dental Expenses. For federal tax purposes, the removal of the prescription requirement took effect in 2020. Before the 2022 tax year, a prescription was generally required for an expense to qualify for Massachusetts tax purposes. For 2022 and later tax years, for Massachusetts tax purposes, amounts paid for over-the-counter medicine (whether or not prescribed) and menstrual care products are considered qualified medical expenses. Generally, qualified medical expenses are the costs, not covered by insurance, of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body. Massachusetts also adopts the federal exclusion from gross income of distributions from an Archer MSA to pay for qualified medical expenses under Code § 220(f) as in effect on January 1, 2022. Go to About IRS Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. If an employer contributes to an Archer MSA, the employee cannot make deductible contributions in the same year. In general, an employee or employer can contribute up to 75% of the annual deductible of a HDHP (65% for individual plans) to an Archer MSA. In addition, employer contributions made on behalf of the employee are excludable from the employee's gross income. Massachusetts adopts the federal deduction allowed to individuals with high deductible health plans (HDHP) for contributions to Archer MSAs under Code § 220 as in effect on Janu. Tax Treatment of Medical Savings Accounts (Archer MSAs)Īrcher MSAs were created to help self-employed individuals and employees of certain small employers meet medical care costs for themselves as well as for their spouses and dependents. $ 8,750 for those enrolled in a family plan ( the contribution limit for family coverage ($ 7,750 ) plus the additional contribution of $ 1, 000).$4, 850 for those enrolled in an individual plan (the contribution limit for individual coverage ($3,850) plus the additional contribution of $1,000). ![]() For 2009 and later tax years, these individuals may annually contribute an additional $1,000 to an HSA.įor example, in tax year 2023, the contribution limits to an HSA for a qualifying individual age 55 or older are: The annual contribution limitations are increased for individuals who are age 55 or older by the end of the calendar year and are not enrolled in Medicare. Massachusetts also conforms to the federal treatment of the earnings in an HSA account and, as a result, such earnings accrue on a tax-free basis. Go to IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans and IRS Publication 502 (2022), Medical and Dental Expenses. Before the 2020 tax year, a prescription was generally required for an expense to qualify. For 2020 and later tax years, amounts paid for over-the-counter medicine (whether or not prescribed) and menstrual care products are considered qualified medical expenses. Massachusetts also conforms to the federal exclusion from gross income of distributions from an HSA to pay for qualified medical expenses under Code § 223(f) as currently in effect. For calendar year 2023, the annual contribution limit is $3,850 for those enrolled in a qualifying individual plan, and $7,750 for those enrolled in a qualifying family plan. The deduction is subject to limitations and is adjusted annually for inflation.įor calendar year 2022, the annual contribution limit to an HSA is $3, 650 for those enrolled in a qualifying individual plan or $7, 300 for those enrolled in a qualifying family plan. Massachusetts conforms to the federal deduction allowed to individuals for contributions to an HSA under Internal Revenue Code (“Code”) § 223(a) as currently in effect. Health Savings Accounts (HSAs) are designed to help individuals enrolled in high-deductible health plans save for future qualified medical and retiree health expenses on a tax-free basis. ![]()
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