HSA Mutual Fund Gains & Dividends for NJ

[wickedgame]

I'm a NJ resident and have an HSA that is invested into a mutual fund with Fidelity with no contributions or distributions made for the year, but I'm uncertain if I need to report the Unrealized Gains and the Dividends, some of which were reinvested into the fund. I'm a NJ resident and finding conflicting information for this. If I need to enter this information, where would I enter it on the State return? Thank you

[RobertB4444 · Accepted solution]

In New Jersey your HSA is just a regular taxable brokerage account.  So the same things that would be taxable in a regular brokerage account are taxable here and need to be entered into your New Jersey return as adjustments to income.

First, your unrealized gains are not taxable in New Jersey in a regular brokerage account and they are also not taxable in an HSA account.  However, gains and losses on sales within the account as well as dividends paid (whether reinvested or not) are just as taxable as they would be in a regular brokerage account.  

Unfortunately, the manager of your HSA is unlikely to track all of these things separately for you so you will need to go back to your statements for the year in order to assemble this information for your return.  

When entering this into your state return the first thing is to make sure that your New Jersey taxable wages on your W2 include any HSA contributions made by you or your employer.  This should mean that your New Jersey wages are higher than your federal wages by the amount of your HSA contributions.  If these amounts have not been included on your W2 in the state wages box then you will enter them on this screen-

Continue through the New Jersey tax return and you will come to this screen.  It is where you will enter any income that is not included on your federal return but is included in New Jersey.

That should solve your issue.

@wickedgame