HSA Employer Contributions - Taxable in California ?

[momukhtar]

Hi all 

I am seeing this when my return info was transferred to the State of California. I have been using turbo tax and contributing to HSA for many years but I am seeing this first time this year. Also in 2024 I had an excess contribution of $115 which I am already withdrawing. I already selected that option in turbo tax. The employer contributioin is around 25% of $4265 , not all and rest are my deductions from payroll. But I do not understand why Turbo tax is counting all as employer contributions. Does this reduce my California tax refund. 

[dlwyckoff]

I have the same problem. A 'W' in box 12 of my W-2 means Employer and employee HSA contributions. Turbo tax is attributing all of it from my employer and saying CA adds it to my income.

[momukhtar]

@dlwyckoff  does your total HSA are also have excess contributions ? 

[MaryK4]

The federal income tax does not include HSA contributions.  California does not allow this income to be excluded so it must be added back to the California return on Schedule CA.

[momukhtar]

@MaryK4  I only see that this year not previous years. 

[BrittanyS]

Currently CA still has not conformed to the Federal guidelines.  Here is what CA states, "Line 13 Health Savings Account Deduction – Federal law allows a deduction for contributions to an HSA account. California law does not conform."  The excluded amount would need to be added back.