Montana Medical Care Saving Account (MSAs)

The Montana Medical Care Savings Account

Information Website: http://www.msuextension.org/

Purpose: AN MSA allows Montanans to save money for medical expenses and long-term health care and reduce their state income taxes. It can be established at a bank, savings bank, credit union or mutual fund company. An MSA is separate from other account and only the account holder can have access to the funds.  Money deposited in an MSA is not subject to Montana income taxation while in the account or if used for eligible medical expenses for the account holder or their dependents.  If the money deposited that year is not used, it remains in the account and earns interest that is free from Montana taxation.  The annual limit that may be used to reduce taxable income is $3,000 annually for each taxpayer.

Eligibility: All resident taxpayers of Montana are eligible to establish a Montana MSA even if they have another health care plan provided by their employer or a Section 125 (Flexible Spending Account) or a Federal Heath Saving Account (HSA). A taxpayer does not have to be in a high deductible health insurance plan to be eligible for an MSA. A MSA cannot be established for a minor child under 18. However, parents’ accounts can be used for eligible expenses for a minor child.

What expenses are eligible: The Montana Department of Revenue accepts eligible medical care expenses as defined under the Internal Revenue Code Section 213 (d). They are the same expenses that are allowed as itemized deductions for federal income tax purposes such as: medial insurance premiums, prescription drugs, insulin, medical, dental, and nursing care, eyeglasses, crutches, hearing aids, transportation for medical care and certain lodging expenses.

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