We provide links to other websites for your convenience. Please note that linked sites may have a privacy and security policy different from our own, and we cannot attest to the accuracy of information. Our privacy policies do not apply to linked third-party websites. Visitors should consult the privacy disclosures on any particular website for further information.
WHAT IS A MEDICAL CHECKING ACCOUNT?
Health savings and tax savings in one account. A Medical Checking Account helps you 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.
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.