Child Health Savings Account Act of 2022

To amend the Internal Revenue Code of 1986 to allow for the establishment of child health savings accounts, and for other purposes. 1. Short title This Act may be cited as the Child Health Savings Account Act of 2022 2. Health savings accounts (a) Child health savings account Section 223 (i) Child health savings account (1) In general In addition to any deduction allowed under subsection (a) for any taxable year, there shall be allowed as a deduction under this section an amount equal to the aggregate amount paid in cash by an individual during the taxable year to a child savings account of a child of the individual. (2) Limitation The amount taken into account under paragraph (1) with respect to each child of an individual during the taxable year shall not exceed an amount equal to $3,000. (3) Child health savings account For the purposes of this subsection, the term child health savings account (4) Treatment of account before age of 18 For the purposes of this section, except as otherwise provided in this subsection, a child health savings account shall be treated as a health savings account of the parents of the child until the child attained the age of 18, after which such account shall be treated as a health savings account of the child. (5) Distributions (A) In general For the purposes of this section— (i) Before age of 18 Any amount paid or distributed out of a child health savings account before the child with respect to whom the account was established has attained the age of 18, shall be included in the gross income of the parents of the child, and subsection (f)(A) shall apply (relating to additional tax on distributions not used for qualified medical expenses). (ii) Age 18 and older Any amount paid or distributed out of such account after the child has attained the age of 18 may only be treated as used to pay qualified medical expenses to the extent such child is not covered as a dependent under insurance (other than permitted insurance) of a parent. (B) Exceptions for disability or death of a child If the child becomes disabled within the meaning of section 72(m)(7) or dies— (i) paragraph (1) shall not apply to any subsequent payment or distribution, and (ii) a parent may rollover the amount in such account to an individual retirement plan of the parent, to any health savings account of the parent, or to any child health savings account of any other child of the parent. (6) Regulations The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Child Health Savings Account Act of 2022 This bill allows for the establishment of child health savings accounts for the benefit of the minor children of a taxpayer. These accounts provide for a tax deduction for amounts paid in cash, up to $3,000 in a taxable year, by an individual taxpayer to such accounts. The bill sets forth rules for the taxation of distributions from such accounts for children under and over the age of 18 years and allows for exceptions to such rules in the case of the disability or death of a child.