MEDICAL SAVINGS ACCOUNTSAN IDAHO INCOME TAX DEDUCTION*
The 1995 Idaho Legislature passed a law creating Medical Savings Accounts (MSAs). This law allows you to save for medical expenses and nursing home costs while reducing the amount of Idaho income tax you owe.*
You can establish an MSA at any participating financial institution in Idaho. This account is used 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 federal adjusted gross income when you file an Idaho income tax return. At the time of this writing, you may deduct up to $10,000 of the amount you contribute each year. If you are married and file a joint tax return, you may deduct up to $20,000 of the amount contributed. Interest earned on your account is also deductible. These deductions can be taken only on your Idaho income tax returns; they do not apply to federal returns.*
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 Also, if you are less than 59 1/2 years of age, funds withdrawn to pay for something other than eligible medical expenses are subject to a 10% penalty.
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*PLEASE CONSULT WITH A TAX ADVISOR FOR QUESTIONS AND INFORMATION REGARDING TAXES AND TO DETERMINE IF YOU WOULD BENEFIT FROM TAX SAVINGS. THE INFORMATION ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS TAX ADVICE.