{"data":{"id":"us-in/ic-6-3-2-18","jurisdiction":"us-in","citation":"IC 6-3-2-18","heading":"Employee medical care savings accounts; exemption limited to deposits before January 1, 2016","body":"Sec. 18. (a) As used in this section, \"eligible medical expense\" has the meaning set forth in IC 6-8-11-3.\n(b) As used in this section, \"medical care savings account\" has the meaning set forth in IC 6-8-11-6.\n(c) This subsection applies only to money deposited by an employer in a medical care savings account before January 1, 2016. Except as provided in subsection (g), the amount of money deposited by an employer in a medical care savings account established for an employee under IC 6-8-11 is exempt from taxation under IC 6-3-1 through IC 6-3-7 as income of the employee in the taxable year in which the money is deposited in the account.\n(d) Except as provided in subsection (g), the amount of money that is:\n(1) withdrawn from a medical care savings account established for an employee under IC 6-8-11; and\n(2) either:\n(A) used by the administrator of the account for a purpose set forth in IC 6-8-11-13; or\n(B) used under IC 6-8-11-13 to reimburse an employee for eligible medical expenses that the employee has incurred and paid for medical care for the employee or a dependent of the employee;\nis exempt from taxation under IC 6-3-1 through IC 6-3-7 as income of the employee.\n(e) Except as provided in IC 6-8-11-11 and IC 6-8-11-11.5, in each taxable year, the amount of money that is:\n(1) withdrawn by an employee from a medical care savings account established under IC 6-8-11; and\n(2) used for a purpose other than the purposes set forth in IC 6-8-11-13;\nis income to the employee that is subject to taxation under IC 6-3-1 through IC 6-3-7.\n(f) If an employee withdraws money from the employee's medical care savings account under the circumstances set forth in IC 6-8-11-17(c), the interest earned on the balance in the account during the full tax year in which the withdrawal is made is subject to taxation under IC 6-3-1 through IC 6-3-7 as income of the employee.\n(g) A taxpayer that excluded or deducted an amount deposited into a medical care savings account from adjusted gross income under:\n(1) section 106 of the Internal Revenue Code;\n(2) section 220 of the Internal Revenue Code; or\n(3) any other section of the Internal Revenue Code;\nis not eligible for an additional exemption from adjusted gross income under this section.","path":["TITLE 6. TAXATION","ARTICLE 3. STATE INCOME TAXES","Chapter 2. Imposition of Tax and Deductions"],"source_url":"https://iga.in.gov/ic/2026/Title_6.html#6-3-2-18","current_through":"2026","vintage":"2026","retrieved_at":"2026-09-09T01:51:39Z","sha256":"c9e2afb9af085a5dd1abcc7bcee2227563b4484ad7aae2086d64d6e315a50eda","source_id":"us-in","stale":false,"prev":"us-in/ic-6-3-2-17","next":"us-in/ic-6-3-2-19"},"notice":"GroundRules: Original legal text. Not legal advice."}