BillM223
Expert Alumni

Deductions & credits

Resident vs. Nonresident/Part-year resident 

 

WI Form 1NPR is for part-year resident and nonresidents. You evidently told TurboTax that you were a full-year resident, hence you got WI Form 1. One of the first question in the Wisconsin interview is "Was Wisconsin your state of residence all year?" If you said "yes", you get the WI Form 1. If you said "no", you probably get more questions about how long you were there, etc., so you will get the WI Form 1NPR. Please go back and review your entries.

 

HSA

 

As you may know , if you made contributions to an HSA prior to 2011, Wisconsin did not permit the deduction of such contributions. However, subsequent to 2010, Wisconsin passed a law that enabled you to make adjustments to your current income in order to simulate taking the HSA contributions prior to 2010.

 

Early on in the WI interview, you may be asked if you want to make adjustments between the federal and state. For HSA, this includes: "The federal provisions relating to HSAs apply for Wisconsin for 2011-2022. However, an adjustment may be required if you withdrew from the account in 2022, you had an HSA prior to 2011 for which you were not allowed a deduction for Wisconsin for contributions to that account, and you reported the earnings on the account as income on your Wisconsin return" (WI Instructions for Schedule I, line 2).

 

As you can imagine, this does not apply to most taxpayers, because the money you had in the HSA in 2011 is probably long spent.

 

NOTE: this applies ONLY if you were in Wisconsin prior to 2011, filing a state return, and contributing to an HSA at the federal level. If not, leave the section blank and continue.

 

Later, in the Wisconsin interview (where I assume you have the question), the first line asks you for the value of your HSA in 2010, less distributions made in 2011, 2012, 2013, and 2014.

 

The second line asks for your HSA distributions in 2022. Note that this is all expenses (even perhaps for non-medical ones).

 

The third line asks for which of the 2022 distributions were for qualified medical expenses...BUT you are expected to enter no large than the amount in the first line - that is, it is really asking for "what part of the remaining pre-2011 HSA value did you distribute in 2022 for qualified medical expenses?" Viewed this way, because you are charging off some of the 2022 distributions against it the remaining pre-2011 HSA value, it's clear that you can't use more than the remaining pre-2011 HSA amount in 2022 for this purpose. 

 

Just limit the third entry to be no larger than the first entry, and the return will be correct.

 

If you did not have a WI HSA prior to 2011 and/or have already spent everything that was in the HSA in 2011 (spent prior to this year), then you don't want to make any entries.

 

If this applies to you, got back to the beginning of the WI interview, set your residency correctly, and don't make any HSA entries (unless you are on of the very few who actually had an HSA prior to 2011 in WI).

 

Questions?

 

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