Source: https://www.law.cornell.edu/uscode/text/26/220
Timestamp: 2020-08-05 09:49:37
Document Index: 479065179

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26 U.S. Code § 220 - Archer MSAs | U.S. Code | US Law | LII / Legal Information Institute
Section 220. Archer MSAs
26 U.S. Code § 220 - Archer MSAs
(2) Monthly limitationThe monthly limitation for any month is the amount equal to 1⁄12 of—
(3) Special rule for married individualsIn the case of individuals who are married to each other, if either spouse has family coverage—
(5) Coordination with exclusion for employer contributionsNo deduction shall be allowed under this section for any amount paid for any taxable year to an Archer MSA of an individual if—
(C) Continued eligibility of employee and spouse establishing Archer MSAsIf, while an employer is a small employer—
(C) Certain growing employers retain treatment as small employerThe term “small employer” includes, with respect to any calendar year, any employer if—
(d) Archer MSAFor purposes of this section—
(1) Archer MSAThe term “Archer MSA” means a trust created or organized in the United States as a medical savings account exclusively for the purpose of paying the qualified medical expenses of the account holder, but only if the written governing instrument creating the trust meets the following requirements:
The term “qualified medical expenses” means, with respect to an account holder, amounts paid by such holder for medical care (as defined in section 213(d)) for such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.
(ii) ExceptionsClause (i) shall not apply to any expense for coverage under—
(A) In generalIf any excess contribution is contributed for a taxable year to any Archer MSA of an individual, paragraph (2) shall not apply to distributions from the Archer MSAs of such individual (to the extent such distributions do not exceed the aggregate excess contributions to all such accounts of such individual for such year) if—
The transfer of an individual’s interest in an Archer MSA to an individual’s spouse or former spouse under a divorce or separation instrument described in clause (i) of section 121(d)(3)(C) shall not be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest shall, after such transfer, be treated as an Archer MSA with respect to which such spouse is the account holder.
(i) In generalIf, by reason of the death of the account holder, any person acquires the account holder’s interest in an Archer MSA in a case to which subparagraph (A) does not apply—
an amount equal to the fair market value of the assets in such account on such date shall be includible if such person is not the estate of such holder, in such person’s gross income for the taxable year which includes such date, or if such person is the estate of such holder, in such holder’s gross income for the last taxable year of such holder.
(g) Cost-of-living adjustmentIn the case of any taxable year beginning in a calendar year after 1998, each dollar amount in subsection (c)(2) shall be increased by an amount equal to—
(1) In generalExcept as provided in paragraph (5), no individual shall be treated as an eligible individual for any taxable year beginning after the cut-off year unless—
(2) Cut-off yearFor purposes of paragraph (1), the term “cut-off year” means the earlier of—
(3) Active MSA participantFor purposes of this subsection—
(B) Special rule for cut-off years before 2007In the case of a cut-off year before 2007—
(C) Cut-off dateFor purposes of subparagraph (B)—
(iv) Special rules for 1997If 1997 is a cut-off year by reason of subsection (j)(1)(A)—
(4) MSA-participating employerFor purposes of this subsection, the term “MSA-participating employer” means any small employer if—
(5) Additional eligibility after cut-off yearIf the Secretary determines under subsection (j)(2)(A) that the numerical limit for the calendar year following a cut-off year described in paragraph (2)(B) has not been exceeded—
(1) Determination of whether limit exceeded for 1997The numerical limitation for 1997 is exceeded if, based on the reports required under paragraph (4), the number of Archer MSAs established as of—
(A) In generalThe numerical limitation for 1998, 1999, 2001, 2002, 2004, 2005, or 2006 is exceeded if the sum of—
the Secretary’s estimate (determined on the basis of the returns described in clause (i)) of the number of MSA returns for such taxable years which will be filed after such date,
(B) Alternative computation of limitationThe numerical limitation for 1998, 1999, 2001, 2002, 2004, 2005, or 2006 is also exceeded if the sum of—
(A) In generalNot later than August 1 of 1997, 1998, 1999, 2001, 2002, 2004, 2005, and 2006, each person who is the trustee of an Archer MSA established before July 1 of such calendar year shall make a report to the Secretary (in such form and manner as the Secretary shall specify) which specifies—
(C) Penalty for failure to file reportThe penalty provided in section 6693(a) shall apply to any report required by this paragraph, except that—
(Added Pub. L. 104–191, title III, § 301(a), Aug. 21, 1996, 110 Stat. 2037; amended Pub. L. 105–33, title IV, § 4006(b)(2), Aug. 5, 1997, 111 Stat. 333; Pub. L. 105–34, title XVI, § 1602(a)(2), (3), Aug. 5, 1997, 111 Stat. 1093, 1094; Pub. L. 106–554, § 1(a)(7) [title II, §§ 201(a), (b), 202(a)(4), (b)(2)(B), (3)–(8), (10), (11)], Dec. 21, 2000, 114 Stat. 2763, 2763A–628, 2763A–629; Pub. L. 107–147, title VI, § 612(a), (b), Mar. 9, 2002, 116 Stat. 61; Pub. L. 108–173, title XII, § 1201(c), Dec. 8, 2003, 117 Stat. 2476; Pub. L. 108–311, title II, § 207(19), title III, § 322(a), (b), Oct. 4, 2004, 118 Stat. 1178, 1183; Pub. L. 109–432, div. A, title I, § 117(a), (b), Dec. 20, 2006, 120 Stat. 2941; Pub. L. 111–148, title IX, §§ 9003(b), 9004(b), Mar. 23, 2010, 124 Stat. 854; Pub. L. 115–97, title I, §§ 11002(d)(1)(T), 11051(b)(3)(D), Dec. 22, 2017, 131 Stat. 2060, 2090; Pub. L. 116–136, div. A, title III, § 3702(b), Mar. 27, 2020, 134 Stat. 416.)
The Social Security Act, referred to in subsecs. (b)(7) and (f)(4)(C), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Title XVIII of the Act is classified generally to subchapter XVIII (§ 1395 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Section 1811 of the Act is classified to section 1395c of Title 42. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.
Another prior section 220, added Pub. L. 100–647, title VI, § 6007(a), Nov. 10, 1988, 102 Stat. 3687, related to jury duty pay remitted to employer, prior to repeal by Pub. L. 101–508, title XI, § 11802(e)(2), Nov. 5, 1990, 104 Stat. 1388–530.
Another prior section 220, added Pub. L. 94–455, title XV, § 1501(a), Oct. 4, 1976, 90 Stat. 1734; amended Pub. L. 95–600, title I, §§ 156(c)(3), 157(a)(2), (b)(2), title VII, § 703(c)(2), (3), Nov. 6, 1978, 92 Stat. 2803, 2804, 2939; Pub. L. 96–222, title I, § 101(a)(14)(B), Apr. 1, 1980, 94 Stat. 204, related to retirement savings for certain married individuals, prior to repeal by Pub. L. 97–34, title III, § 311(e), Aug. 13, 1981, 95 Stat. 280, applicable to taxable years beginning after Dec. 31, 1981, and deductions allowed under section 220 of this title, as in effect prior to its repeal, treated as deductions under section 219 of this title.
2020—Subsec. (d)(2)(A). Pub. L. 116–136 substituted “For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.” for “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”
2017—Subsec. (f)(7). Pub. L. 115–97, § 11051(b)(3)(D), substituted “clause (i) of section 121(d)(3)(C)” for “subparagraph (A) of section 71(b)(2)”.
Subsec. (g)(2). Pub. L. 115–97, § 11002(d)(1)(T), substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
2010—Subsec. (d)(2)(A). Pub. L. 111–148, § 9003(b), inserted at end “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”
Subsec. (f)(4)(A). Pub. L. 111–148, § 9004(b), substituted “20 percent” for “15 percent”.
2006—Subsec. (i)(2), (3)(B). Pub. L. 109–432, § 117(a), substituted “2007” for “2005” wherever appearing in headings and text.
Subsec. (j)(2). Pub. L. 109–432, § 117(b)(1), substituted “2004, 2005, or 2006” for “or 2004” in heading and in introductory provisions of subpars. (A) and (B).
Subsec. (j)(4)(A). Pub. L. 109–432, § 117(b)(2), substituted “2004, 2005, and 2006” for “and 2004” in introductory provisions.
2004—Subsec. (d)(2)(A). Pub. L. 108–311, § 207(19), inserted “, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.
Subsec. (i)(2), (3)(B). Pub. L. 108–311, § 322(a), substituted “2005” for “2003” wherever appearing in headings and text.
Subsec. (j)(2). Pub. L. 108–311, § 322(b)(1)(B), substituted “2002, or 2004” for “or 2002” in heading.
Subsec. (j)(2)(A), (B). Pub. L. 108–311, § 322(b)(1)(A), substituted “2002, or 2004” for “or 2002” in introductory provisions.
Subsec. (j)(2)(C). Pub. L. 108–311, § 322(b)(3), amended heading and text of subpar. (C) generally. Prior to amendment text read as follows: “The numerical limitation shall not apply for 2000.”
Subsec. (j)(4)(A). Pub. L. 108–311, § 322(b)(2), substituted “2002, and 2004” for “and 2002” in introductory provisions.
2002—Subsec. (i)(2). Pub. L. 107–147, § 612(a), substituted “2003” for “2002” in subpars. (A) and (B).
Subsec. (i)(3)(B). Pub. L. 107–147, § 612(a), substituted “2003” for “2002” in heading and introductory provisions.
Subsec. (j)(2). Pub. L. 107–147, § 612(b)(1), substituted “1998, 1999, 2001, or 2002” for “1998, 1999, or 2001” wherever appearing in heading and text.
Subsec. (j)(4)(A). Pub. L. 107–147, § 612(b)(2), substituted “2001, and 2002” for “and 2001”.
2000—Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(8)], substituted “Archer MSAs” for “Medical savings accounts” in section catchline.
Subsecs. (a), (b)(5). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer MSA” for “a Archer MSA”.
Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account” wherever appearing.
Subsec. (c)(1)(C). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(7)], substituted “Archer MSAs” for “medical savings accounts” in heading.
Subsec. (c)(1)(C)(i). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer MSA” for “a Archer MSA”.
Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (c)(1)(D). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (c)(4)(C)(ii). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (d). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(4)], substituted “Archer MSA” for “Medical savings account” in heading.
Subsec. (d)(1). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(5)], substituted “Archer MSA” for “Medical savings account” in heading.
Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4), (b)(3)], in introductory provisions, substituted “Archer MSA” for “medical savings account” and inserted “as a medical savings account” after “United States”.
Subsec. (d)(2)(C), (3). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (e)(1). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10), (11)], substituted “An Archer MSA is exempt” for “A Archer MSA is exempt” and “ceased to be an Archer MSA” for “ceased to be a Archer MSA”.
Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account” in two places.
Subsec. (e)(2). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (f). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer MSA” for “a Archer MSA” wherever appearing.
Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4), (b)(2)(B)], substituted “Archer MSA” for “medical savings account” wherever appearing and “Archer MSAs” for “medical savings accounts” in introductory provisions of par. (3)(A).
Subsec. (h). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer MSA” for “a Archer MSA”.
Subsec. (i). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(6)], substituted “Archer MSAs” for “medical savings accounts” in heading.
Subsec. (i)(2)(A), (B). Pub. L. 106–554, § 1(a)(7) [title II, § 201(a)], substituted “2002” for “2000”.
Subsec. (i)(3)(A). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (i)(3)(B). Pub. L. 106–554, § 1(a)(7) [title II, § 201(a)], substituted “2002” for “2000” in heading and introductory provisions.
Subsec. (i)(4)(A). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (i)(4)(B). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (i)(5)(A). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (j)(1). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts” in introductory provisions.
Subsec. (j)(2). Pub. L. 106–554, § 1(a)(7) [title II, § 201(b)(1)(A)], substituted “1998, 1999, or 2001” for “1998 or 1999” in heading and in introductory provisions of subpars. (A) and (B).
Subsec. (j)(2)(A). Pub. L. 106–554, § 1(a)(7) [title II, § 201(b)(1)(B)], substituted “750,000 (600,000 in the case of 1998)” for “600,000 (750,000 in the case of 1999)” in concluding provisions.
Subsec. (j)(2)(B)(ii). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (j)(2)(C). Pub. L. 106–554, § 1(a)(7) [title II, § 201(b)(1)(C)], added subpar. (C).
Subsec. (j)(3)(A), (B). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(4)], substituted “Archer MSA” for “medical savings account”.
Subsec. (j)(4)(A). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer MSA” for “a Archer MSA” in introductory provisions.
Pub. L. 106–554, § 1(a)(7) [title II, §§ 201(b)(2), 202(a)(4)], in introductory provisions, substituted “1999, and 2001” for “and 1999” and “Archer MSA” for “medical savings account”.
Subsec. (j)(4)(A)(i). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts”.
Subsec. (j)(4)(B). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer MSA” for “a Archer MSA”.
Subsec. (j)(4)(D). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(2)(B)], substituted “Archer MSAs” for “medical savings accounts” in two places.
Subsec. (c)(3). Pub. L. 105–34, § 1602(a)(2), redesignated subpars. (B) to (D) as (A) to (C), respectively, and struck out former subpar. (A) which read as follows: “Medicare supplemental insurance,”.
Subsec. (d)(2)(C). Pub. L. 105–34, § 1602(a)(3), substituted “described in clauses (i) and (ii) of subsection (c)(1)(A)” for “an eligible individual”.
Pub. L. 116–136, div. A, title III, § 3702(d)(1), Mar. 27, 2020, 134 Stat. 416, provided that:
“The amendment made by subsections (a) and (b) [amending this section and section 223 of this title] shall apply to amounts paid after December 31, 2019.”
Pub. L. 111–148, title IX, § 9003(d)(1), Mar. 23, 2010, 124 Stat. 854, provided that:
“The amendments made by subsections (a) and (b) [amending this section and section 223 of this title] shall apply to amounts paid with respect to taxable years beginning after December 31, 2010.”
Pub. L. 111–148, title IX, § 9004(c), Mar. 23, 2010, 124 Stat. 854, provided that:
“The amendments made by this section [amending this section and section 223 of this title] shall apply to distributions made after December 31, 2010.”
Pub. L. 108–311, title III, § 322(c), Oct. 4, 2004, 118 Stat. 1183, provided that:
“The amendments made by this section [amending this section] shall take effect on January 1, 2004.”
Pub. L. 107–147, title VI, § 612(c), Mar. 9, 2002, 116 Stat. 61, provided that:
“The amendments made by this section [amending this section] shall take effect on January 1, 2002.”
Pub. L. 106–554, § 1(a)(7) [title II, § 201(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–628, provided that:
“The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [Dec. 21, 2000].”
Pub. L. 109–432, div. A, title I, § 117(c), Dec. 20, 2006, 120 Stat. 2942, provided that:
The report required by section 220(j)(4) of the Internal Revenue Code of 1986 to be made on August 1, 2005, or August 1, 2006, as the case may be, shall be treated as timely if made before the close of the 90-day period beginning on the date of the enactment of this Act [Dec. 20, 2006].
The determination and publication required by section 220(j)(5) of such Code with respect to calendar year 2005 or calendar year 2006, as the case may be, shall be treated as timely if made before the close of the 120-day period beginning on the date of the enactment of this Act. If the determination under the preceding sentence is that 2005 or 2006 is a cut-off year under section 220(i) of such Code, the cut-off date under such section 220(i) shall be the last day of such 120-day period.”
Pub. L. 108–311, title III, § 322(d), Oct. 4, 2004, 118 Stat. 1183, provided that:
The report required by section 220(j)(4) of the Internal Revenue Code of 1986 to be made on August 1, 2004, shall be treated as timely if made before the close of the 90-day period beginning on the date of the enactment of this Act [Oct. 4, 2004].
The determination and publication required by section 220(j)(5) of such Code with respect to calendar year 2004 shall be treated as timely if made before the close of the 120-day period beginning on the date of the enactment of this Act. If the determination under the preceding sentence is that 2004 is a cut-off year under section 220(i) of such Code, the cut-off date under such section 220(i) shall be the last day of such 120-day period.”
Pub. L. 104–191, title III, § 301(k), Aug. 21, 1996, 110 Stat. 2052, provided that:
“The Secretary of the Treasury or his delegate shall—
during 1997, 1998, 1999, and 2000, regularly evaluate the number of individuals who are maintaining medical savings accounts and the reduction in revenues to the United States by reason of such accounts, and
provide such reports of such evaluations to Congress as such Secretary determines appropriate.”
Pub. L. 104–191, title III, § 301(l), Aug. 21, 1996, 110 Stat. 2052, mandated a comprehensive study regarding the effects of medical savings accounts in the small group market on selection, health costs, preventive care, consumer choice, high deductible plans, and other relevant issues, and mandated a report to Congress on the results of the study by Jan. 1, 1999.
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