- Minimum requirement of $25 to open the account
- Individual or joint account available
- There are no limits on contributions. However, contributions that qualify for Idaho income tax deductions are limited annually to $10,000 for a single return or $20,000 for a married couple filing a joint return. Contributions are not deductible on federal returns.
- Convenience of draft writing abilities
- Earn tiered-rate dividends on balances of $100 or more
- You manage your account, not your employer
What is a Medical Savings Account?
In a nutshell, it’s health savings and tax savings in one convenient account. A Medical Savings Account (MSA) is a savings plan that allows you to save for medical expenses, reduce Idaho state income taxes, and earn tax-exempt dividends as long as funds are 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.
Pro tip: Medical expenses can be conveniently deducted by setting up automatic payments, paid by draft, or funds can be transferred to another share draft account for payment.
What are the benefits?
Contributions can be made at any time during the calendar year and may be deducted from adjusted gross income when you file an Idaho income tax return. The deduction does not apply to federal returns. A single filer can deduct up to $10,000 of the contributions made each year. If married and filing a joint income tax return, you may deduct up to $20,000 of the contributions made each year.
Withdrawals can be made at any time and must be used to pay eligible medical expenses for the account holder, spouse, dependents and dependent children of the account holder. The burden of proof that a withdrawal from an MSA was used to pay an eligible medical expense is upon the account holder, not the credit union. Withdrawals made before age 59 1/2 for any purpose other than an eligible medical expense are subject to a 10% Idaho State Tax Commission penalty and must be claimed as income on Idaho State Income Tax returns. Withdrawals after age 59 1/2 for any purpose other than an eligible medical expense must be claimed as income on Idaho State Income Tax returns, but there is no 10% penalty.
To learn more, please contact a Member Relationship Officer at one of our branches or visit the Idaho State Tax Commission Medical Savings Account publication.