Washington (Oct. 1, 2002) -- Medical Savings Accounts will continue to be available through 2002.

The Internal Revenue Service said that the Archer MSA pilot project would continue, since the number of MSAs filed for 2001 and 2002 fall short of the 750,000 number which would require the project to be terminated early.

Under the MSA provisions of the Tax Code, if the number of MSA returns filed for 2001 or a projection for 2002 exceeds 750,000, then Oct. 1, 2002 is a "cut-off" date for the project. In 2001, 21,079 MSA returns were filed. The number of MSA returns projected to be filed for 2002 is 59,151.

When MSAs were created in 1996, Congress was concerned that its benefits might be too generous, and limited the number of participants. However, the actual number of participants has never come close to the ceiling in any year. The MSA pilot project is slated to end in 2003.

-- Electronic Accountant Newswire staff

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