I'm looking at my Illinois Schedule NR and on Line 24 HSA Deduction, the Illinois Portion is all of what is on the 1040. I think it should be 0. How do I update?

[davidheupel]

The Illinois Portion of my HSA deduction should be zero since I am a full time resident of Florida.  I'm only completing an IL tax return due to having some rental income from IL.

[BillM223]

Why do you think it should be zero? The State of Illinois already knows that you are a nonresident (or else you would not be using Schedule NR). And the instructions literally say, "Line 24: Health savings account deduction   Enter the amount of health savings account deduction you claimed this year as shown in Column A."

The net result is that whether or not you live in the state, you should remove any HSA contributions from state income by following the instructions for Schedule NR.

[j-ong]

Hello @BillM223,

I am in a similar situation as @davidheupel.

How do I go about removing the HSA contribution on the IL income?

Appreciate any guidance you can provide.

Thanks.

[BillM223]

From what do you want to remove the HSA contribution? Line 24 on Schedule NR?

[j-ong]

Hello @BillM223,

That is correct.

I tried doing an override on the form itself.

Not sure why TurboTax is not automatically excluding my HSA contribution it since I am a non-resident. 

 

[BillM223]

I don't think we are on the same wavelength here.

The first poster wanted to set the HSA deduction to zero, but I told him that he did not want to do that, because the Illinois instructions state that for line 24, Column B should be equal to Column A.

By leaving the HSA contribution in Column B of line 24, the contribution is being removed from Illinois income. See line 38 on Schedule NR. 

So, just to be sure, on your return, Line 24, Columns A and B on Illinois Schedule NR is equal to line 13 on Schedule 1 (1040), right? This is as it should be.

[j-ong]

Hello @BillM223 

Thanks for the response.

I am filing IL state return because I received an IL K1 with a net loss from rental real estate activities.

My understanding is that it's important to record these net losses so I can offset any potential income (gains) in the future.

My IL Schedule NR currently shows:

- lines 15 and 21, column B: -$2,492 (net loss from rentals)

- line 24, columns A and B: -$1,792 (HSA deductions)

- lines 38 and 41, column B: -$4,284 (add up the net loss from rentals and HSA deduction)

My questions are:

- How does IL know that my actual net loss from rental this year is -$2,492 instead of the -$4,284?  This is the reason why I initially did the override and placed $0 on line 24 column B  - For IL to know that I have a net loss from rentals of -$2,492 not -$4,284.    

- Do I need to adjust (or add back) the HSA contribution on line 40 to reflect the -$2,492 net loss from rentals?

- Also, is there an equivalent Form 8582 in IL that tracks passive activity losses?  I expect another net loss from rentals next year so trying to think how TT or IL tracks this. 

Appreciate any guidance you can provide.

[CatinaT1]

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