Medical Savings Account in Idaho
Medical Savings-keep yourself and your gross income healthy.
Westmark's Medical Savings Account (MSA) assists you in sheltering a portion of your gross income from Idaho State Income Taxes.
As an account holder, you may deduct up to $10,000 of your MSA contributions, per year, for paying future eligible medical expenses. If you are married, your spouse may open an additional MSA, allowing you to claim combined deductions of up to $20,000 for paying future eligible medical expenses.
Contributions to an MSA are only deductible from Idaho State Income Tax, not Federal Income Tax.
All MSAs are individual or joint accounts with a designated beneficiary. Upon death, funds in an individual MSA account may be withdrawn by the beneficiary without penalty but must be included in reportable income.
If you are married and file a joint Idaho State Income Tax Return, you may open a joint account.
Any member with taxable income may open a Westmark Medical Savings Account. There are no minimum deposit requirements and best of all, no set -up charges or services fees.
Your account will earn dividends on the daily balance, compounded monthly, based on a tiered rate structure published for Westmark Daily Dividend Savings Accounts. Please contact a Financial Service Representative for current rate information at (208) 523-1071 or 1-800-574-5626.
You may make a "direct transfer" from an MSA at another financial institution to your Westmark MSA, without penalty. Ask a Financial Service Representative for assistance.
Reporting Tax Information
Westmark will report the dividends earned on your MSA to the Idaho State Tax Commission. If you have a joint account, this information will be reported under the Primary Member's name and Social Security Number.
As the account holder you are responsible for maintaining records of all deposits and withdrawals from your MSA as well as for declaring penalties for withdrawals that are made for non-medical expenditures, when filing your Idaho State Income Tax Return. You must also report any deposit amount in excess of your tax deductible contributions each year. However, these deposits may be carried forward as unexpended funds, retaining their tax exempt status for the following year(s) when they are used for eligible medical expenses.
An individual may contribute a maximum of $10,000 per calendar year. A married couple, who file a joint State of Idaho Tax Return, may contribute a maximum of $20,000 per calendar year.
- Directly at a teller window.
- Transfer funds to your checking account with CALL 24 or Westmark Personal Branch.
- Use the free checks available exclusively for the Westmark MSA. (Limit one book per quarter).
Withdrawals for eligible medical expenses are not subject to Idaho State Income Tax. Earnings (dividends) paid on your MSA are tax deductible, if you use them for eligible medical expenses or tax deferred until you withdraw them, otherwise.
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 ½ years of age, funds withdrawn to pay for something other than eligible medical expenses are subject to a 10% penalty.
You must retain records of any medical services received, the date of services, and the evidence of your payment. (Check copies are available free of charge, upon request). Only eligible medical expenses incurred after your contributions to an MSA are exempt from Idaho State Income Tax. Eligible medical expenses include those paid by you for medical expenses rendered to you or your dependent children and listed in the Internal Revenue Code, such as:
- Medical Insurance Premiums
- Hospitalization Care
- Ambulance Service
- Prescription Drugs
- Dental Services
- Lab Fees & Services
- Office Visits to your Physician
- Nursing Services
NOTE: This account presents many tax liability issues. Please consult your tax advisor concerning your tax situation and applicable rules governing the deductibility of contributions; your ability to withdraw funds for eligible medical expenses, the penalties imposed by the State of Idaho on withdrawals made for non-medical purposes and the deductibility of dividends earned on this account.