Implementation Status
The additional 20 percent tax on non-qualified distributions is noted in IRS Publication 969.
Statutory Text
SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM
HSAS AND ARCHER MSAS NOT USED FOR QUALIFIED MEDICAL
EXPENSES.
(a) HSAS.—Section 223(f)(4)(A) of the Internal Revenue Code of
1986 is amended by striking ‘‘10 percent’’ and inserting ‘‘20 percent’’.
(b) ARCHER MSAS.—Section 220(f)(4)(A) of the Internal Revenue
Code of 1986 is amended by striking ‘‘15 percent’’ and inserting
‘‘20 percent’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to distributions made after December 31, 2010.