Archer MSA Pilot Program Continues

The Internal Revenue Service has announced plans to continue the Archer Medical Savings Account (MSA) pilot program beyond the planned cut-off date of October 1, 2002. Originally the IRS indicated it would only allow 750,000 MSAs to be created under the pilot program. Only 21,079 MSA returns were filed for 2001, and the number of MSA returns expected to be filed for 2002 is 59,151.

Taxpayers with MSA accounts enjoy tax treatment similar to Individual Retirement Arrangements (IRAs) for their medical accounts. These taxpayers make tax-deductible contributions to their medical accounts, and the contributions remain tax-free if used for qualified medical purposes. Earnings in the account are also tax-free. Rollover provisions enable users to keep money in their MSA accounts after year end rather than forcing a use-it-or-lose-it condition.

MSA participants must be covered by a health insurance plan that features a high deductible. Money from the MSA is then used to pay the medical expenses not covered by the participant's insurance plan.

Had the cut-off date been enforced, no new MSA accounts would be eligible for the tax benefits that accompany the program.

Because the number of active MSAs does not exceed 750,000, October 1, 2002 will not be a cut-off date, nor will 2002 be a cut-off year according to IRS Announcement 2002-90.

You may like these other stories...

Boehner addresses GOP priorities ahead of midterm electionsHouse Speaker John Boehner (R-OH) on Thursday delivered what amounted to closing arguments ahead of the November elections, laying out a list of Republican...
As anyone who's ever been through a divorce can attest, the pain of parting with your spouse isn't just emotional—the fallout from divorce can wreak financial havoc as well long after the dust in the courtroom...
Former DOJ Tax Division head Kathryn Keneally joining DLA Piper in New YorkGlobal law firm DLA Piper announced on Thursday that Kathryn Keneally, the former head of the US Justice Department Tax Division, is joining the firm...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.