First, the amount in box 16 (State Wages) on the W-2 is not used on thee California tax return. This amount is printed in line 12 on form 540, and then never used again on form 540.
Instead, the CA return starts with the federal adjusted gross income (line 13 on the 540) and then makes additions and subtractions.
The "employer contribution" (the sum of what the employer contributed and what you contributed by payroll deduction) is shown with code W in box 12 on the W-2. On the CA return, this appears on form CA(540) on line 1, column C.
If you also made direct contributions to your HSA, not through your employer, then this appears on form CA(54) on line 12 (Section C).
NOTE: TurboTax does not know the difference between what your employer contributed and what you contributed through payroll deduction - this is all combined in the code W amount, and TurboTax has no way to know which is which.
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