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Solved

Employer HSA contributions added back to CA income

Forum|Forum|5 years ago
March 13, 2021
1 reply
5 views

TT adds HSA contributions back to my CA income for my state return. My W2 Box 16 state wages already contains this HSA add-back, i.e.) On my W2, Box 16 state wages = Box 1 fed wages + Box 12W employer HSA contributions. How do I correct the duplicate add-back?

The work-around last year was to enter an offsetting amount in the Miscellaneous Adjustments under Other Adjustments to Income. Is this still the correction to account for this issue?

TurboTax Premier Online

Best answer by BillM223

As it turns out, the fact that your employer included the HSA contributions in box 16 on your W-2 doesn't make any difference.

While this number appears on page 1 of form 540 on line 12, in fact, it is never used anywhere on the return, so there is no duplicate add-back.

The CA return starts with federal adjusted gross income (which includes the HSA exclusion), so CA has to back out the exclusion by adding the code W amount (from box 12 on the W-2) to line 1 of form CA(540), so that it can be an addition to CA income on line 16, form 540.

No further adjustment is necessary.

Level 15

As it turns out, the fact that your employer included the HSA contributions in box 16 on your W-2 doesn't make any difference.

While this number appears on page 1 of form 540 on line 12, in fact, it is never used anywhere on the return, so there is no duplicate add-back.

The CA return starts with federal adjusted gross income (which includes the HSA exclusion), so CA has to back out the exclusion by adding the code W amount (from box 12 on the W-2) to line 1 of form CA(540), so that it can be an addition to CA income on line 16, form 540.

No further adjustment is necessary.

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