Can I deduct HSA contributions from my Georgia State taxes as a non-resident?

[camerodj]

Alright here goes...

I had contributions to an HSA outside of my W2.  IE: not automatically made through employer.  On the federal form 1040 Schedule 1 this appears on line 25, and then appears on line 36 Schedule 1 as the sum for adjustments.  That is then taken off on 1040 Line 7 to calculate AGI.  Yes, I filled out form 8889.

Alright, I am a Georgia non-resident.  That requires me to fill out Form GA500 schedule 3.  Line 6 is adjustments from 1040.  Whether or not this can be counted in column C (applicable to my GA taxes) is the question.  The instructions for the Georgia form 500 do not seem to include this as an applicable adjustment in GA, but I feel I am missing something since if you were a resident form 500 uses AGI (Line 8).

[DanielV01 · Accepted solution]

What you will need to do is divide the Georgia income by the Federal Income (Schedule 3, Column C box 1 divided by Column A box 1), and then multiply that percentage by the amount of HSA deduction taken reported in box 6 of column A.  These are the entire amounts of Federal adjustments that are taken against Federal income, which includes the out-of-pocket HSA contribution.  This entire amount is prorated to the amount of Georgia income, if the job you worked in Georgia contributed proportionately to the HSA.

[Edited 03/25/2019: 14:53 PST]

[camerodj]

This is not true for non-resident filing GA500 Schedule 3.  That adjustment needs to find its way into column C on schedule 3 for it to be deducted from GA income.  It seems like it should be allowed in column C but I can't find documentation to confirm.

[camerodj]

And to further clarify, my Federal return is correct, i'm just trying to get my GA return to be correct.

[DanielV01]

@camerodj I looked at the Schedule 3 of the Georgia 500 and my updated instructions are as above provided that the Georgia amount is proportionate.  However, if the Georgia income exclusively was used for the HSA (in other words, the HSA contribution was only eligible against the income earned in Georgia because that is when you had qualifying health insurance for it), you would put the entire HSA contribution in box 6 Column C.  Likewise, if the HSA contribution was not eligible from the Georgia portion of income, then you put a 0 in box 6 of Column C as no deduction allowed.  It sounds like your situation should be proportionate.

[camerodj]

Great, thank you TurboTaxDanielV!

[DanielV01]

You are welcome.