Sec. 2. Health savings accounts for children
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Section 223 of the Internal Revenue Code of 1986 is amended by redesignating subsection
(h)as subsection
(i)and by inserting after subsection
(g)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 or grandchild of the taxpayer. The amount taken into account under paragraph
(1)with respect to each child or grandchild of the taxpayer, as the case may be, for the taxable year shall not exceed the sum of the monthly limitations with respect to such child for months during the taxable year that the child is an eligible individual. The aggregate amount of contributions which may be made for any taxable year to all child health savings accounts established and maintained on behalf of a child shall not exceed the sum of the monthly limitations for months during the taxable year that the child is an eligible individual. The monthly limitation for any month with respect to a child is 1/12 of the amount in effect for the taxable year under subsection (c)(2)(A)(ii)(I). 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 first taxable year (and each taxable year thereafter) for which no deduction under section 151 is allowable to any taxpayer with respect to such child, after which such account shall be treated as a health savings account of the child. The preceding sentence shall not apply for purposes of applying the limitations in subsection
(b)to a health savings account of the taxpayer. 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. For purposes of this section, the term qualified medical expenses shall, with respect to any child health savings account, not include any amounts paid for medical care (as defined in section 213(d)) for any individual other than the child for whose benefit the account is maintained. If the child becomes disabled within the meaning of section 72(m)(7) or dies— subsection (f)(4)(A) shall not apply to any subsequent payment or distribution, and the taxpayer may rollover the amount in such account to any health savings account of the taxpayer or grandparent of the child or to any child health savings account of any other child of the taxpayer. Any legal guardian of a child shall be treated as the parent of such child for purposes of this section. 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. . Amounts in a child health savings account shall not be taken into account in determining resources for purposes of title XIX of the Social Security Act. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.