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Rollovers

Lines 9a and 9b

Form W-2, you must report it as “Other

income” on your tax return. However, you

A rollover is a tax-free distribution

Additional 15% Tax

can withdraw some or all of the excess

(withdrawal) of assets from one Archer

employer contributions for 2010 and they

MSA that is reinvested in another Archer

Archer MSA distributions included in

will be treated as if they had not been

MSA or a health savings account.

income (line 8) are subject to an

contributed if:

Generally, you must complete the rollover

additional 15% tax unless one of the

•

You make the withdrawal by the due

within 60 days following the distribution.

following exceptions apply.

date, including extensions, of your 2010

You can make only one rollover

For distributions made after

tax return (but see the Note below),

contribution to an Archer MSA during a

•

December 31, 2010, the additional

You do not claim an exclusion from

1-year period. See Pub. 590, Individual

tax is increased to 20%.

income for the amount of the withdrawn

CAUTION

Retirement Arrangements (IRAs), for

contributions, and

more details and additional requirements

Exceptions to the Additional 15%

•

You also withdraw any income earned

regarding rollovers.

Tax

on the withdrawn contributions and

Note. If you instruct the trustee of your

The additional 15% tax does not apply to

include the earnings in “Other income” on

Archer MSA to transfer funds directly to

distributions made after the date that the

your tax return for the year you withdraw

the trustee of another Archer MSA, the

account holder —

the contributions and earnings.

•

transfer is not considered a rollover.

Dies,

•

There is no limit on the number of these

Note. If you timely filed your return

Becomes disabled (see page 1), or

•

transfers. Do not include the amount

without withdrawing the excess

Turns age 65.

transferred in income, deduct it as a

contributions, you can still make the

If any of the exceptions apply to any of

contribution, or include it as a distribution

withdrawal no later than 6 months after

the distributions included on line 8, check

on line 6a.

the due date of your tax return, excluding

the box on line 9a. Enter on line 9b only

extensions. If you do, file an amended

15% (.15) of any amount included on line

Line 7

return with “Filed pursuant to section

8 that does not meet any of the

301.9100-2” written at the top. Include an

exceptions.

In general, include on line 7 distributions

explanation of the withdrawal. Make all

from all Archer MSAs in 2010 that were

Example 1. You turned age 66 in

necessary changes on the amended

used for the qualified medical expenses

2010 and had no Archer MSA during

return (for example, if you reported the

(see page 1) of:

2010. Your spouse turned age 63 in 2010

contributions as excess contributions on

1. Yourself and your spouse.

and received a distribution from an Archer

your original return, include an amended

2. All dependents you claim on your

MSA that is included in income. Do not

Form 5329 reflecting that the withdrawn

tax return.

check the box on line 9a because your

contributions are no longer treated as

3. Any person you could have claimed

spouse (the account holder) did not meet

having been contributed).

as a dependent on your return except

the age exception for the distribution.

that:

Enter 15% of the amount from line 8 on

Deducting an Excess Contribution

a. The person filed a joint return,

line 9b.

in a Later Year

b. The person had gross income of

Example 2. Both you and your

$3,650 or more, or

spouse received distributions from your

You may be able to deduct excess

c. You, or your spouse if filing jointly,

Archer MSAs in 2010 that are included in

contributions for previous years that are

could be claimed as a dependent on

income. You were age 65 at the time you

still in your Archer MSA. The excess

someone else’s return.

received the distributions and your

contribution you can deduct in the current

spouse was age 63 when he or she

year is the lesser of the following two

For this purpose, a child of

received the distributions. Check the box

amounts.

•

parents that are divorced,

on line 9a because the additional 15% tax

Your maximum Archer MSA

TIP

separated, or living apart for the

does not apply to the distributions you

contribution limit for the year minus any

last 6 months of the calendar year is

received (because you met the age

amounts contributed to your Archer MSA

treated as the dependent of both parents

exception). However, the additional 15%

for the year.

•

whether or not the custodial parent

tax does apply to your spouse’s

The total excess contributions in your

releases the claim to the child’s

distributions. Enter on line 9b only 15% of

Archer MSA at the beginning of the year.

exemption.

the amount of your spouse’s distributions

Any excess contribution remaining at

included in line 8.

However, if a contribution was made to

the end of a tax year is subject to the

Example 3. You turned age 65 in

an Archer MSA in 2010 (by you or your

additional tax. See Form 5329.

2010. You received distributions that are

employer), do not include on line 7

included in income both before and after

withdrawals from an Archer MSA if the

Part II—Archer MSA

you turned age 65. Check the box on line

individual for whom the expenses were

9a because the additional 15% tax does

incurred was not covered by an HDHP or

Distributions

not apply to the distributions made after

was covered by a plan that was not an

the date you turned age 65. However, the

HDHP (other than the exceptions listed

Line 6a

additional 15% tax does apply to the

on page 1) at the time the expenses were

distributions made on or before the date

Enter the total distributions you and your

incurred.

you turned age 65. Enter on line 9b, 15%

spouse received in 2010 from all Archer

Example. In 2010, you were covered

of the amount of these distributions

MSAs. These amounts should be shown

by an HDHP with self-only coverage and

included in line 8.

in box 1 of Form 1099-SA.

your spouse was covered by a health

plan that was not an HDHP. You made

Section B—Medicare

Line 6b

contributions to an Archer MSA for 2010.

Advantage MSA

Include on line 6b any distributions you

You cannot include on line 7 withdrawals

received in 2010 that were rolled over.

made from the Archer MSA to pay your

Distributions

See Rollovers on this page. Also include

spouse’s medical expenses incurred in

any excess contributions (and the

Complete Section B if you (or your

2010 because your spouse was covered

earnings on those excess contributions)

spouse, if filing jointly) received

by a plan that was not an HDHP.

included on line 6a that were withdrawn

distributions from a Medicare Advantage

You cannot take a deduction on

by the due date, including extensions, of

MSA in 2010. If both you and your spouse

Schedule A (Form 1040) for any

your return. See the instructions for line 5

received distributions, complete a

amount you include on line 7.

that begin on page 3.

separate Form 8853, Section B, for each

CAUTION

-4-

Instructions for Form 8853 (2010)

Instructions For Form 8853 - Archer Msas And Long-Term Care Insurance Contracts - 2010 Page 4

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