This measure changes section 223 of the Internal Revenue Code so that distributions from health savings accounts (HSAs) used to pay funeral expenses of the account beneficiary are treated as qualified distributions. It adds a definition of "funeral expenses" that lists items such as burial, cremation, embalming, interment or inurnment, preparation of remains, clothing for remains, a casket or urn, hearse service, funeral director services, venue fees, transporting remains, grave digging, a grave liner, and a grave plot. The bill limits the total amount treated as funeral expenses to $5,000 per account beneficiary. It also provides that funeral expenses paid during the 90-day period after an account beneficiary's death are treated as if they were incurred immediately before death. The amendments apply to amounts paid after enactment in taxable years ending after that date.
If you or someone named on an HSA is paying for that account beneficiary's funeral costs, this change would allow distributions from the HSA to be treated as qualified distributions when used for those funeral expenses, subject to the $5,000 aggregate limit per beneficiary. Funeral expenses paid within 90 days after the beneficiary's death may be treated as having been incurred before death for HSA purposes. The rule takes effect for amounts paid after the date the change becomes law.
The bill sets a per-beneficiary limit of $5,000 on amounts treated as funeral expenses. No publicly available information on any estimated federal budgetary costs, revenue effects, or other fiscal impacts is included in the provided text or metadata.
No publicly available information.
No publicly available information.