As you know, California does not allow HSA contributions to be deducted.
As the others noted above, HSA contributions made by the employer or by the employee by means of payroll deduction, are removed from Wages in boxes 1, 3, and 5 before the W-2 is printed. This means that when the Wages are brought from the federal return to the state return, that the HSA deduction is buried inside it.
Therefore, TurboTax adds this amount (which is the code W amount in box 12 on the W-2) back to California state income, to eliminate the deduction on the California return.
As for contributions made directly to the HSA (not through the employer), they are reported on the 1040 on line 12 on Schedule 1 (1040). This amount is just not subtracted from CA income to make the state AGI, unlike the federal return where it is subtracted (line 12, Sch 1).
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
