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daiann22
New Member

For California taxes, how do I enter the earnings / income from HSA?

In my HSA (via OptumBank), I invested some of my cash into a mutual fund a few years back. I just liquidated this investment this year (2018) in order to withdraw my excess contribution from 2017 before the tax deadline.

In 2017 and prior years, I did not sell anything from my investment. In the State Taxes Income section for California, what do I enter for

1) Interest Earned - Should I enter a percentage or dollar value here? If it is a percentage, how do I determine this? Do I still need to enter my earnings in 2017 if I did not pull any investment out?

2) Dividends Earned - I was able to figure this out from my historical transactions. Do I need to enter it?

3) Net capital gain or loss from HSA - How is this different from Interest Earned? Again, is this required if I did not sell any of my investments?

Moving forward into 2018, now that I have liquidated my investments, will I be receiving a tax form from HSA for the 2018 Tax year?

I attached a screenshot.

2 Replies
BMcCalpin
Level 13

For California taxes, how do I enter the earnings / income from HSA?

1. Enter the dollar amount for interest.

2. Yes, California treats an HSA as a regular after-tax investment account, so enter the dividends.

3. In a mutual fund, capital gains can be generated when the fund buys and sells stock. This happens all the time, not just when you liquidate investments. This is definitely different from interest.

4. I do not know if Optum will send you a tax form (like a 1099-Combo) as a financial company would for an after-tax investment account. HSAs are pre-tax in 47 out of 50 states, and I don't know to what extent HSA custodians go to accommodate the taxpayers in the other three.

Do the best that you can in finding the interest, dividends, and capital gains. You might call Optum and see if you can speak to a customer service rep who is familiar with the three states that don't recognize HSAs (California, New Jersey, and Alabama), to see if Optum can optionally provide a statement that will assist you.

ngochanle2210
Level 2

For California taxes, how do I enter the earnings / income from HSA?

Hello, may I know if by "Net capital gain or loss from HSA", does it mean it needs to be the realized gain? Not unrealized gains. Is it correct understanding? Thank you. 

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