Sec. 240. Child health savings account
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/bill/114/hr/2653/ih/section-240·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 223 , as amended by this Act, is amended by adding at the end the following new subsection: In the case of an individual, in addition to any deduction allowed under subsection
(a)for any taxable year, there shall be allowed as a deduction under this section an amount equal to the aggregate amount paid in cash by the taxpayer during the taxable year to a child health savings account of a child of the taxpayer. The amount taken into account under paragraph
(1)with respect to each child of the taxpayer for the taxable year shall not exceed an amount equal to $3,000. For purposes of this subsection, the term child health savings account means a health savings account designated as a child health savings account and established for the benefit of a child of a taxpayer, but only if— such account was established for the benefit of the child before the child attains the age of 5, and under the written governing instrument creating the trust, no contribution will be accepted to the extent such contribution, when added to previous contributions to the trust for the calendar year, exceeds the dollar amount in effect under paragraph (2). For purposes of this section, except as otherwise provided in this subsection, a child health savings account established for the benefit of the child of a taxpayer shall be treated as a health savings account of the taxpayer until the child attains the age of 18, after which such account shall be treated as a health savings account of the child. In the case of a child health savings account established under this section for the benefit of a child of a taxpayer— Any amount paid or distributed out of such account before the child has attained the age of 18, shall be included in the gross income of the taxpayer, and subparagraph
(A)of subsection
(f)shall apply (relating to additional tax on distributions not used for qualified medical expenses). Any amount paid or distributed out of such account after the child has attained the age of 18 may only be treated as used to pay qualified medical expenses to the extent such child is not covered as a dependent under insurance (other than permitted insurance) of a parent. If the child becomes disabled within the meaning of section 72(m)(7) or dies— subparagraph
(A)shall not apply to any subsequent payment or distribution, and the taxpayer may rollover the amount in such account to an individual retirement plan of the taxpayer, to any health savings account of the taxpayer, or to any child health savings account of any other child of the taxpayer. Subparagraph
(B)of subsection (d)(2) shall not apply to any health savings account originally established as a child health savings account. The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including rules for determining application of this subsection in the case of legal guardians and in the case of parents of a child who file separately, are separated, or are not married. . The amendments made by this section shall apply to taxable years beginning after December 31, 2015.