NJ - Medical Expense Deduction and HSA

[superman23]

Taxpayer has an HSA. Employer and taxpayer each contribute and this is a pre-tax deduction, reducing federal taxable wages. For NJ the HSA contribution must be added back to NJ taxable wages. That is understood.

The NJ medical expense deduction is calculated on Worksheet F. In TurboTax Forms, Worksheet F, line 1b, is an addition for "NJ medical insurance premiums included in your NJ wages but not your federal wages on your W-2 and not deductible on Federal Schedule A". Is that line meant for including HSA contributions?

For NJ, the distributions from an HSA to pay medical expenses should be included in medical expenses, and TurboTax does this from the input. I'm not sure what is meant to be on line 1b of the worksheet, as described above. If you were to include both the contributions to the HSA and the distributions from the HSA in medical expenses, isn't that a duplication?

[BillM223 · Accepted solution]

"Worksheet F, line 1b" is clearly NOT intended to include HSA contributions. This field is for certain health insurance premiums, which contributions to an HSA cannot be construed as. 

Besides, line 4 on this Worksheet is for Archer/MSA contributions - this is very similar to HSA contributions (The Archer/MSA program preceded HSAs); however, since HSAs are not mentioned here (see the NJ instructions on the bottom of page 22) - and they could have been - it is clear that HSAs do not apply here, either.

So, no duplication to be found here.