1040-US: Calculation of Archer MSA limitation

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Question

How is the Archer MSA limitation calculated?

Answer

The tax application takes the amount entered in the Amount of annual deductible field in Screen 5498SA, subject to limitation, and multiplies it by 75 percent (Family coverage plan) or 65 percent (Self-only coverage plan). The tax application divides the calculated result by 12 and multiplies it by the Number of months in qualified high deductible health plan field to come up with the Archer MSA or long-term care insurance contract limitation amount.

Note: For married filing separate returns, the tax application  limits the Archer MSA amount to 50 percent of the calculated amount. If there was a change in the eligibility or coverage during the year or a limit of other than 50 percent for married filing separately is desired, use the HSA/MSA limitation (Force) field in Screen 5498SA to override the calculated amount.

Related topic: Medical and health savings accounts FAQs (1040)

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