An Idaho MSA is a special savings account that allows you to reduce your Idaho taxable income and set aside money for medical expense. The MSA can be opened by anyone of any age, and has nothing to do with employment status or insurance coverage (or lack thereof). You can deposit up to $10,000 or $20,000 each year (depending on single vs. joint tax filing status) in order to pay all your medical bills, dental expenses, co-pays, deductibles and insurance premiums. The money you deposit is a dollar for dollar deduction on your Idaho State Income Tax, and what you don’t spend rolls over every year. If you’re over age 59.5, you can pull the money out as supplemental retirement income with no penalty (like an IRA), or simply leave it in the account to pay for upcoming medical costs as they occur.
In a nutshell, it’s a simple way for Idahoans to deposit money to an account that will reduce their State taxable income, and allow them to pay their medical expenses they’re already going to pay anyway, with tax-free dollars. If someone pays their own insurance premiums, or has any out-of-pocket medical expenses at all, this will instantly save them about 7.5% on those payments (because that is the Idaho State income tax rate).
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