Oklahoma § 36-6060.18 - Withdrawals – Taxation – Transfer of interest

§ 36-6060.18. Withdrawals – Taxation – Transfer of interest

A. Notwithstanding paragraphs C, D, E, and F of this section,

an eligible individual may withdraw money from their health savings

account for any purpose other than a purpose described in Section

6060.17 of this title.

B. If the eligible individual withdraws money for any purpose

other than a purpose described in Section 6060.17 of this title, at

any other time, all of the following shall apply:

1. The amount of the withdrawal is income for the purposes of

the Oklahoma Income Tax Act in the tax year of the withdrawal; and

2. The tax imposed on the withdrawal which is includable in

income shall be increased by ten percent (10%) of the amount which

is so includable.

C. The amount of disbursement of any assets of a health savings

account pursuant to a filing for protection under Section 101 of

Title 11 of the United States Code by an eligible individual or

person for whose benefit the account was established is not

considered a withdrawal for purposes of this section. The amount of

a disbursement is not subject to taxation under the Oklahoma Income

Tax Act and subsection B of this section does not apply.

D. The transfer of an eligible individual's interest in a

health savings account to an eligible individual's spouse or former

spouse under a divorce or separation instrument shall not be

considered a taxable transfer made by such eligible individual,

notwithstanding any other provision of this title, and the interest

Oklahoma Statutes - Title 36. Insurance

shall, after the transfer, be treated as a health savings account

with respect to which the spouse is the eligible individual.

E. Upon the death of the eligible individual, the trustee or

custodian shall distribute the principal and accumulated interest of

the health savings account to the estate of the deceased.

F. If an employee becomes employed with a different employer

that participates in a health savings account program, the employee

may transfer their health savings account to that new employer's

trustee or custodian, or to an individually purchased account

program.

Added by Laws 2005, c. 306, § 5, eff. Nov. 1, 2005. Amended by Laws

2007, c. 269, § 4, emerg. eff. June 4, 2007.