Calfornia HSA Contributions
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Calfornia HSA Contributions

I contributed into a HSA for 2019 outside of payroll deduction.  I am getting my deduction Federally adjusted upon filing.  When I got to the California returns, it appears that TurboTax might have added what I contributed post tax into income on the California side. It appears that I may have added extra income when that was not the case.  Is this right? How can I take that contribution out on the California side?

5 Replies
Employee Tax Expert

Calfornia HSA Contributions

TurboTax is correct.  Because the state of California does not recognize HSAs, your HSA contributions are not tax deductible for California state income tax.

  • Your HSA contribution will be deducted from your gross pay for calculating the federal tax withholdings.
  • It will not reduce your California state income tax withholding.
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Returning Member

Calfornia HSA Contributions

I contributed to HSA outside of work.  After I entered the HSA contribution the amount of Fed tax owed decreased, which is great.  Why does the amount of California State tax owed increased by 70%? 

Expert Alumni

Calfornia HSA Contributions

Yes, unfortunately, California taxes HSA contributions and the Long Term Capital Gain is considered a contribution.

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Returning Member

Calfornia HSA Contributions

Hi,

In reply to the CA state tax increased.  This is the first HSA contribution and there is no gain. 

Employee Tax Expert

Calfornia HSA Contributions

California does not allow a deduction for Health Savings Accounts so your contribution is added back to your state income.

@public1

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