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What is an Archer MSA?

Archer MSA was designed to help self-employed business owners and employees of small businesses to save for future medical expenses. 

Go to this section in Credit Karma Tax: Medical Savings Account (MSA) Contributions

Who qualifies for an Archer MSA?

There are strict requirements to be considered an eligible individual:

  • You (or your spouse, if married) must either be self-employed or employed by a small business who had an average of 50 or less employees over the past 2 calendar years.
  • You (or your spouse, if married) must be covered under a High Deductible Health Plan (HDHP) and have no additional non-HDHP health coverage.
  • You can’t be enrolled in Medicare.
  • You can’t be claimed as a dependent on someone else’s tax return.

How do I make contributions to an Archer MSA?

No new Archer MSA accounts have been established after 2007 as the account was replaced by the HSA.

As a result, there are only 2 ways to make contributions to an Archer MSA:

  1. You were an active participant in an Archer MSA before 2008.
  2. You became an active participant after 2007, due to coverage under a high deductible health plan (HDHP) from an Archer MSA participating employer.

If you have an MSA and made contributions during the tax year, you can enter this information under Medical Savings Account (MSA) Contributions.

Can I roll over an Archer MSA to an HSA?

You can roll over a balance from an Archer MSA to an HSA. This rollover contribution won’t count against you with the contribution limit, isn’t deductible, and won’t be included in your income.

Go to this section in Credit Karma Tax: Health Savings Account (HSA)

If you have form 1099-SA, go to this section in Credit Karma Tax: Form 1099-SA Summary

Here’s some things to keep in mind:

  1. Generally, any distribution from an Archer MSA that you roll over into another Archer MSA or an HSA isn’t taxable if you complete the rollover within 60 days.
  2. Archer MSAs and HSAs can only receive one rollover contribution during a 1-year period.
  3. If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer isn’t considered a rollover. There’s no limit on the number of these transfers.

Source: irs.gov

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