3.26 Ark. Code R. 51-436(5)
The amount of MSA contributions made by a taxpayer should be broken down on a month-by-month basis. For any given month, the limitation on the deduction that can be taken for that particular month is set forth at IRC Sec. 220(b)(1)&(2). Other key points regarding deductibility of contributions include:
* The annual contribution limit is the sum of the limits determined separately for each month, based on the individual's status and health plan coverage as of the first day of the month;
* The deduction for MSA contributions cannot exceed the taxpayer's compensation. For employees, see IRC Sec. 220(b)(4)(A). For self-employed individuals, see IRC Sec. 220(b)(4)(B).
* No deduction is allowed to an individual if any other person is entitled to a personal exemption on account of the individual, whether or not the personal exemption is actually taken;
* Contributions to an MSA for a tax year can be made until the due date for filing the individual's tax return for the year (determined without regard to extensions). For example, with respect to Arkansas individual income tax returns, the deadline for contributions that a taxpayer wishes to deduct on his 1997 return would be May 15, 1998;
* MSA contributions are taken into account in arriving at AGI (i.e., they are taken above-the-line). As such, MSA contributions can be deducted even if the taxpayer does not itemize deductions.
3.26 Ark. Code R. 51-436(5)