HSA Distributions for previous year's expenses in NJ

[msapo24]

I have accrued medical expenses in 2022, but was not billed for some of it until after the year end.   So when I paid them out of my HSA, they were not reported on HSA 2022 statement.  Since NJ has a 2% floor on the amount that can be claimed, I don't reach it every year.  Can I claim 2022 medical expenses on my NJ return even if they were not paid out until 2023 ? 

[Critter-3]

You cannot claim any medical expenses that have been or will be reimbursed thru the HSA account ... if you do deduct them on the 2022 return you would have to amend the 2022 return when you get the reimbursement in 2023 so why bother. 

[rjs]

What Critter-3 said applies to your federal tax return. New Jersey does not give you a tax deduction for HSA contributions, so for the medical expenses on your New Jersey tax return you can include expenses that you paid from your HSA. However, you can only include expenses that you actually paid during the year, either from your HSA or from other funds. On your 2022 tax return you can only include expenses that you paid in 2022. Any expenses that you pay in 2023 must be included on your 2023 tax return, regardless of when the expense was incurred or billed.

[FitWit]

@rjs What about expenses that I paid out of pocket in the year they were incurred, but plan to repay myself in the future from my HSA account, i.e., take a distribution? 

Can I deduct these expenses on my NJ taxes in the year they were incurred?

I know not to deduct them from Fed. 

In the year that I take an HSA distribution for these past expenses, will I need to report the distribution as income on NJ taxes?  I'm thinking that I won't because had I taken the HSA distribution in the same year that I incurred the medical expenses, I wouldn't need to treat the distribution as income on my NJ taxes.

Thanks in advance.

[MarilynG1]

If you received a 1099-SA for medical expenses, and you enter it in your Federal return as required, the info carries over to Medical Expenses in your New Jersey return.

You'll see a screen in the NJ interview for Medical Expenses that will include the 1099-SA amount.  If you repaid yourself for out-of-pocket medical expenses (that you didn't claim before), no adjustment needs to be made. 

@FitWit 

[FitWit]

Thank you @MarilynG1 .

I have no 1099-SA for this tax year as I didn’t take a distribution from my HSA but I did include medical expenses on NJ only that I plan to take a distribution in a future year.  Hope this was allowed.
In the year that I take the HSA distribution for these expenses, I will get a 1099-SA and report as you have described.