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In the current year, Magnum Corporation began offering Devin and other employees access to a high deductible health savings plan and an accompanying health savings
In the current year, Magnum Corporation began offering Devin and other employees access to a high deductible health savings plan and an accompanying health savings account (HSA) through a Section 125 Cafeteria Plan. Which of the following statements regarding the income tax treatment is CORRECT?
- Contributions to the health savings account avoid federal and state taxes, but not FICA taxes, in the current year.
- Contributions into the health savings account must be used before December 31st of the plan year.
- Starting at age 65, funds from the health savings account can be withdrawn penalty free for non-medical related uses.
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