Instructions For Form 8853 - Archer Msas And Long-Term Care Insurance Contracts - 2002 Page 5
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totals on the respective lines of the
On line 12, enter the fair market value
Becomes disabled.
controlling Form 8853 (the combined
of the Medicare+Choice MSA as of the
If either of the exceptions applies to any
Form 8853 for both spouses). If either
date of death.
of the distributions included on line 14,
•
spouse checked the box on line 15a of
On line 13, enter qualified medical
check the box on line 15a. Next, if either
the statement Form 8853, check the box
expenses incurred by the account holder
of the exceptions applies to all the
on the controlling Form 8853. Attach the
before the date of death that you paid
distributions included on line 14, enter
two statement Forms 8853 to your tax
within 1 year after the date of death.
zero on line 15b. Otherwise, complete the
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return after the controlling Form 8853.
Complete line 14.
worksheet below to figure the amount of
The distribution is not subject to the
the additional 50% tax to enter on line
Medicare+Choice MSA
additional 50% tax. Report any earnings
15b.
A Medicare+Choice MSA is an Archer
on the account after the date of death as
MSA designated as a Medicare+Choice
Section C—Long-Term
income on your tax return.
MSA to be used solely to pay the qualified
Line 12
Care (LTC) Insurance
medical expenses of the account holder.
Enter the total distributions you received
To be eligible for a Medicare+Choice
Contracts
MSA, you must be eligible for Medicare
in 2002 from all Medicare+Choice MSAs.
See Filing Requirements for Section C
These amounts should be shown in box 1
and have a HDHP that meets the
on page 6.
Medicare guidelines. Contributions to the
of Form 1099-MSA. This amount should
not include any erroneous contributions
account may be made only by Medicare.
Definitions
The contributions and any earnings, while
made by Medicare (or any earnings on
the erroneous contributions) or any
in the account, are not taxable to the
Policyholder
account holder. A distribution used
amounts from a trustee-to-trustee transfer
The policyholder is the person who owns
exclusively to pay for the qualified
from one Medicare+Choice MSA to
the proceeds of the LTC insurance
another Medicare+Choice MSA of the
medical expenses of the account holder is
contract, life insurance contract, or viatical
not taxable. Distributions that are not
same account holder.
settlement and also may be the insured
used for qualified medical expenses of
Line 13
individual. The policyholder is required to
the account holder are included in income
Enter the total distributions from all
report the income, even if payment is
and also may be subject to a penalty.
assigned to a third party or parties. In the
Medicare+Choice MSAs in 2002 that
Death of Account Holder
were used for your qualified medical
case of a group contract, the certificate
holder is considered to be the
expenses (see page 1).
If the account holder’s surviving spouse is
policyholder.
the designated beneficiary, the
You may not take a deduction on
Medicare+Choice MSA is treated as a
!
Schedule A (Form 1040) for any
Qualified LTC Insurance Contract
regular Archer MSA (not a
amount you include on line 13.
CAUTION
In general, amounts paid under a
Medicare+Choice MSA) of the surviving
qualified LTC insurance contract are
spouse for distribution purposes. Follow
Lines 15a and 15b
excluded from your income. However, if
the instructions in Section A for Death of
you receive per diem payments (defined
Account Holder beginning on page 1.
Additional 50% Tax
on page 6), the amount you may exclude
In all other cases, the account ceases
Medicare+Choice MSA distributions
is limited.
to be an MSA as of the date of death. If
included in income (line 14) may be
you are the beneficiary, complete Form
A qualified LTC insurance contract is a
subject to an additional 50% tax unless
8853 as follows.
contract issued:
one of the following exceptions applies.
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Write “Death of Medicare+Choice MSA
After December 31, 1996, that meets
Exceptions to the Additional 50%
account holder” across the top of Form
the requirements of section 7702B,
Tax
8853.
including the requirement that the insured
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Write the name(s) shown on your tax
The additional 50% tax does not apply to
must be a chronically ill individual
return and your SSN in the spaces
distributions made on or after the date
(defined on page 6) or
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provided at the top of the form. Skip Parts
that the account holder —
Before January 1, 1997, that met state
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I and II.
Dies or
law requirements for LTC insurance
Additional 50% Tax Worksheet—Line 15b
(Keep for your records)
1.
Enter the total distributions included on Form 8853, line 14, that do not meet either of the exceptions
to the additional 50% tax
1.
2.
Did you have a Medicare+Choice MSA on December 31, 2001?
No. Enter the amount from line 1 on line 6 below and go to line 7.
Yes. Enter the value of your Medicare+Choice MSA on December 31, 2001
2.
3.
Enter the amount of the annual deductible for your HDHP policy
on January 1, 2002
3.
4.
Multiply line 3 by 60% (.60)
4.
5.
Subtract line 4 from line 2. If zero or less, enter -0-
5.
6.
Subtract line 5 from line 1. If zero or less, enter -0-
6.
7.
Enter one-half of line 6 here and on Form 8853, line 15b
7.
-5-
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