Section 15-61-203 - Withdrawal of funds from account for purposes other than eligible medical expenses(1) An employee or account holder may withdraw money from the individual's medical care savings account for any purpose other than an eligible medical expense or for paying the expenses of administering the account only on the last business day of the account administrator's business year. Money withdrawn from an account pursuant to this subsection that had been excluded from taxation must be taxed as ordinary income of the employee or account holder.(2) There is a penalty equal to 10% of the amount of a withdrawal for a withdrawal other than for eligible medical expenses or for expenses of administering the account or other than on the last business day of the account administrator's business year. The administrator may withhold the penalty from the amount of the withdrawal and, on behalf of the employee or account holder, pay the penalty to the department. Payments made to the department pursuant to this section must be deposited in the general fund. Money withdrawn from an account pursuant to this subsection must be taxed as ordinary income of the employee or account holder if it had been excluded from taxation.(3) For the purposes of this section, "last business day of the account administrator's business year", as applied to an account administrator who is also the account holder or an employee, means the last weekday in December.Amended by Laws 2021, Ch. 503,Sec. 35, eff. 1/1/2024, and applicable to income tax years beginning after December 31, 2023.Amended by Laws 2017, Ch. 152,Sec. 4, eff. 10/1/2017, and applicable to income tax years beginning after 12/31/2017.En. Sec. 5, Ch. 295, L. 1995; amd. Sec. 2, Ch. 296, L. 1997.