Will you have any medical expenses in the year 2019 that won’t be covered by your health insurance policy, a flexible spending account (FSA), or your Federal Health Care Savings Account (HSA)? If so, you can still open a Montana Medical Care Savings Account (MSA) by Dec. 31 and cover those expenses. If you deposit up to $4,000, (the maximum in 2019) you can reduce your Montana adjusted gross income by that amount. For individuals who have a taxable income above $17,900, this will result in a net savings of about $276.
This is really a good deal for Montanans! Thank your legislators. Yet, in past years only 1.4 percent of Montanans have taken advantage of this opportunity. When I ask why, many explain that they were told they were ineligible because they don’t have a high deductible health insurance policy. WRONG. You do not have to be in a high deductible health insurance plan to be eligible for an MSA. And, unlike an HSA, you are still eligible to contribute to an MSA when you are age 65 years or older. Others say they have never heard of a Montana MSA. Believe it or not these accounts have been around since 1997.
The income tax advantage of depositing into a Montana MSA does not apply to your federal income taxes and should not be confused with the Federal Health Savings Accounts (HSAs) or Federal Flexible Spending Plans (FSAs).
If you do not use any of the money deposited in your MSA during the year it was deposited, it remains in the account and earns interest that is free from Montana income taxation. The money in the MSA then can be used for eligible medical care expenses in future years.
If you pay 2019 medical bills either by check, cash, or credit/debit card, you can still add up those eligible expenses throughout the year, make a deposit by December 31 and reimburse yourself from the MSA account on the same day for eligible expenses paid January through December.
The key word is paid. You can reimburse yourself for paid eligible medical expenses by the end of 2019. But if you haven't yet paid those bills because your health insurance company hasn't sorted out what it will pay and what you still owe, you still can reimburse yourself for those unpaid eligible expenses during 2020 when you pay them.
The amount you can use to reduce your Montana income is the total deposited, not the amount used for medical expenses during the tax year. For example, if you deposited $4,000 in an MSA but only used $500 for eligible medical expenses during 2019, you still get to reduce your income by $4,000. The remaining $3,500 is available for paying medical expenses in future years.
You can use your MSA funds to pay medical expenses not only for yourself, but also your spouse, parents, dependents and anyone else. Let me repeat that last part…you can use your MSA fund to pay for eligible medical expenses of ANYONE…your best friend, a colleague who needs the money, anyone except your dog. Again, thank your legislators for this provision passed in 2017.
Your MSA can also be used as a legacy. Some Montanans have put money in their MSAs every year, but have not used it because they are saving the funds for long term care expenses. Others plan to use their MSA as a legacy for their children and grandchildren. You can place a payable on death (POD) designation on your MSA, identifying who you want to receive the money after your death. Your spouse, parents and kids can then use the money for their own eligible medical expenses without Montana income tax consequences.
Parents and grandparents could gift money to their adult children and adult grandchildren for an MSA. Whatever amount is gifted and deposited in an MSA can be taken off the adult children and grandchildren’s income. The adult grandkids get the tax break, but not the grandparents.
An MSU Extension MontGuide will help you decide if you would benefit from a Montana medical care savings account. The publication (MontGuide 199817 HR) can be downloaded free http://msuextension.org/publications/FamilyFinancialManagement/MT199817HR.pdf
A copy can also be obtained from your local County or Reservation Extension office or by emailing email@example.com.
Marsha A. Goetting is the MSU Extension Family Economics Specialist in Bozeman. She is going to deposit $4,000 in her MSA in anticipation of higher medical expenses in 2019 than she had in 2018.
Scientists at Montana State University and their partners have developed a fact sheet and short film that describe the results of a research study on the potential impacts of climate change on sagebrush ecosystems.
The research team, comprising scientists and students from MSU, Colorado State University, the University of Massachusetts-Amherst and Utah State University, used field observations with ecological models to look at what may happen to Artemisia tridentate – or big sagebrush – under various scenarios of climate change.
According to researchers, sagebrush currently covers 120 million acres across 14 Western states and three Canadian provinces, providing habitat for hundreds of different species of plants and animals. Wildlife such as greater and Gunnison sage grouse, pygmy rabbits, mule deer and pronghorn depend heavily on sagebrush habitats.
Sagebrush ecosystems are often multi-use: livestock grazing, oil and gas development, and mineral extraction occur along with opportunities for recreation such as hiking, fishing and other activities that support local economies.
The fact sheet is available to download for free at ato.montana.edu/sagebrush. A film shared on the same website also describes the research findings. The roughly 7-minute film was produced by students and faculty of MSU’s School of Film and Photography.
Organizations that would like to have multiple printed copies of the fact sheet for distribution can email requests to MSU Academic Technology and Outreach at firstname.lastname@example.org.
The research was funded by the U.S. Geological Survey with additional support from the Great Basin Landscape Conservation Cooperative and the Department of the Interior North Central Climate Science Center.