Instructions For Form 8853 (2015) (Page 5 of 8) in pdf

Additional 50% Tax Worksheet—Line 13b

Keep for Your Records

Enter the total distributions included on Form 8853, line 12, that do not meet either of the exceptions to the additional 50% tax

. . . . . . . . . . . . .

Did you have a Medicare Advantage MSA on December 31, 2014?

No.

Enter one-half of line 1 on Form 8853, line 13b

STOP

Yes. Enter the value of your Medicare Advantage MSA on December 31, 2014

. . . . . . . . . . . . . . . . . . . .

Enter the amount of the annual deductible for your HDHP policy on January 1,

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Multiply line 3 by 60% (.60) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtract line 4 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtract line 5 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Enter one-half of line 6 here and on Form 8853, line 13b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If the account holder's estate is the

Exceptions to the Additional 50%

Per Diem Payments

beneficiary, the value of the Medicare

Tax

Per diem payments are payments of a fixed

Advantage MSA as of the date of death is

amount made on a periodic basis without

included in the account holder's final income tax

The additional 50% tax does not apply to

regard to actual expenses incurred. Box 3 of

return.

distributions made on or after the date that the

Form 1099-LTC should indicate whether

account holder—

The distribution is not subject to the

payments were per diem payments.

Dies, or

additional 50% tax. The beneficiary should

Becomes disabled (see Disabled, earlier).

report any earnings on the account after the

Chronically Ill Individual

If either of the exceptions applies to any of the

date of death as income on the beneficiary's tax

distributions included on line 12, check the box

return.

A chronically ill individual is someone who has

on line 13a. Next, if either of the exceptions

been certified (at least annually) by a licensed

applies to all the distributions included on

Note. If, during the tax year, you are the

health care practitioner as—

line 12, enter -0- on line 13b. Otherwise,

beneficiary of two or more Medicare Advantage

Being unable to perform at least two activities

complete the

Additional 50% Tax Worksheet

MSAs or you are a beneficiary of a Medicare

of daily living (eating, toileting, transferring,

figure the amount of the additional 50% tax to

Advantage MSA and you have your own

bathing, dressing, and continence), without

enter on line 13b.

Medicare Advantage MSA, you must complete

substantial assistance from another individual,

a separate Form 8853 for each MSA. Enter

for at least 90 days, due to a loss of functional

Section C—Long-Term

“statement” at the top of each Form 8853 and

capacity, or

complete the form as instructed. Next, complete

Care (LTC) Insurance

Requiring substantial supervision to protect

a controlling Form 8853, combining the

the individual from threats to health and safety

Contracts

amounts shown on each of the statement

due to severe cognitive impairment.

Forms 8853. Attach the statements to your

See

Filing Requirements for Section

C, later.

paper tax return after the controlling Form 8853.

Accelerated Death Benefits

Line 10

For more information, see Pub. 502.

Generally, amounts paid as accelerated death

Definitions

Enter the total distributions you received in

benefits under a life insurance contract or for

2015 from all Medicare Advantage MSAs.

the sale or assignment of any portion of the

Policyholder

These amounts should be shown in box 1 of

death benefit as part of a viatical settlement, are

Form 1099-SA. This amount should not include

fully excludable from your gross income if the

The policyholder is the person who owns the

any erroneous contributions made by Medicare

insured is a

Terminally Ill Individual

(defined

proceeds of the LTC insurance contract, life

(or any earnings on the erroneous

later). Accelerated death benefits paid with

insurance contract, or viatical settlement, and

contributions) or any amounts from a

respect to an insured individual who is

also can be the insured individual. The

trustee-to-trustee transfer from one Medicare

chronically ill generally are excludable from

policyholder is required to report the income,

Advantage MSA to another Medicare

your gross income to the same extent as they

even if payment is assigned to a third party or

Advantage MSA of the same account holder.

would be under a qualified LTC insurance

parties. In the case of a group contract, the

contract.

certificate holder is considered to be the

Line 11

policyholder.

Enter the total distributions from all Medicare

Terminally Ill Individual

Advantage MSAs in 2015 that were used only

Qualified LTC Insurance Contract

for the account holder's qualified medical

A terminally ill individual is any individual who

expenses (see

Qualified Medical

Expenses,

has been certified by a physician as having an

A qualified LTC insurance contract is a contract

earlier).

illness or physical condition that can reasonably

issued:

be expected to result in death within 24 months

After December 31, 1996, that meets the

You cannot take a deduction on

of the date of certification.

requirements of section 7702B, including the

Schedule A (Form 1040) for any

requirement that the insured must be a

Line 15

amount you include on line 11.

CAUTION

chronically ill individual (defined later), or

Special rules apply in determining the taxable

Before January 1, 1997, that met state law

Lines 13a and 13b

payments if other individuals received per diem

requirements for LTC insurance contracts at the

Additional 50% Tax

payments under a qualified LTC insurance

time the contract was issued and has not been

contract or as accelerated death benefits with

changed materially.

Medicare Advantage MSA distributions

respect to the insured listed on line 14a. See

included in income (line 12) may be subject to

Multiple

Payees, later, for details.

In general, amounts paid under a qualified

an additional 50% tax unless one of the

LTC insurance contract are excluded from your

following exceptions applies.

income. However, if you receive

Per Diem

Payments

(defined next), the amount you can

exclude is limited.

Instructions for Form 8853 (2015)

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Instructions For Form 8853 (2015) Page 5

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