Reporting HSA earnings in CA

[vpan]

For TY2019, I see that TT is saying that cap gains, interest, and dividends earned in a HSA have to be reported in CA as income, even though they are not taxed at the Federal level.

Does this apply even if I didn't withdraw any money from my HSA?  I only made regular contributions to the HSA through my employer.  Do I still have to report cap gains, interest, and dividends?  Thanks!

[Bsch4477]

Yes, those are taxed by California since California doesn’t recognize any HSA taxable benefits and those amounts are income even though they are accrued in the HSA.