§ 6-3-2-18 — Employee medical care savings accounts; exemption limited to deposits before January 1, 2016

Indiana § 6-3-2-18

• Jurisdiction: Indiana
• Art. 3: STATE INCOME TAXES
• Ch. 2: Imposition of Tax and Deductions

Text

(a) As used in this section, "eligible medical
expense" has the meaning set forth in IC 6-8-11-3.
(b) As used in this section, "medical care savings account" has the
meaning set forth in IC 6-8-11-6.
(c) This subsection applies only to money deposited by an employer
in a medical care savings account before January 1, 2016. Except as
provided in subsection (g), the amount of money deposited by an
employer in a medical care savings account established for an
employee under IC 6-8-11 is exempt from taxation under IC 6-3-1
through IC 6-3-7 as income of the employee in the taxable year in
which the money is deposited in the account.
(d) Except as provided in subsection (g), the amount of money that
is:
(1) withdrawn from a medical care savings account established
for an employee under IC 6-8-11; and
(2) either:
(A) used by the administrator of the account for a purpose set
forth in IC 6-8-11-13; or
(B) used under IC 6-8-11-13 to reimburse an employee for
eligible medical expenses that the employee has incurred and
paid for medical care for the employee or a dependent of the
employee;
is exempt from taxation under IC 6-3-1 through IC 6-3-7 as income of
the employee.
(e) Except as provided in IC 6-8-11-11 and IC 6-8-11-11.5, in each
taxable year, the amount of money that is:
(1) withdrawn by an employee from a medical care savings
account established under IC 6-8-11; and
(2) used for a purpose other than the purposes set forth in IC 6-8-11-13;
is income to the employee that is subject to taxation under IC 6-3-1
through IC 6-3-7.
(f) If an employee withdraws money from the employee's medical
care savings account under the circumstances set forth in IC 6-8-11-17(c), the interest earned on the balance in the account during
the full tax year in which the withdrawal is made is subject to taxation
under IC 6-3-1 through IC 6-3-7 as income of the employee.
(g) A taxpayer that excluded or deducted an amount deposited into
a medical care savings account from adjusted gross income under:
(1) section 106 of the Internal Revenue Code;
(2) section 220 of the Internal Revenue Code; or
(3) any other section of the Internal Revenue Code;
is not eligible for an additional exemption from adjusted gross income
under this section.

Legislative History

As added by P.L.92-1995, SEC.1 and P.L.93-1995, SEC.1. Amended by P.L.60-1997, SEC.3; P.L.250-2015, SEC.23.