I think the OP question is, if pretax HSA is a Section 125 Cafeteria plan, deducted from my Box 1 federal wages, but included in my Box 16 NJ wages, should I adjust my NJ income down by this amount? I’m not clear that TurboTax automatically takes the Box 12 code W amounts and reduces the NJ income amount for this “medical expense” related item. In TaxSlayer (I’m a VITA volunteer using this IRS-contracted software) we have to adjust NJ income down manually for the Section 125 amounts related to health insurance.
