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All of the HSA contributions my employer makes via payroll are pre-tax for federal but post tax for state and my income on my W2 is different by this exact amount?

It appears I am paying state taxes twice on the HSA amount, once via payroll and then now when I am filing, how can I remove this amount from my tax return

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All of the HSA contributions my employer makes via payroll are pre-tax for federal but post tax for state and my income on my W2 is different by this exact amount?

The way that the W-2 is completed when you have an HSA is that the sum of the amount that your employer contributes to your HSA AND what you contribute by means of a payroll deduction plan is removed from Wages in boxes 1, 3, and 5 on your W-2. That is, the money contributed to the HSA is not even included in your income; this is how you avoid paying taxes on the amount.

However, a very few states do not honor the exclusion of HSA contributions from income. Therefore, it would not be surprising if the state wages value on your W-2 included the HSA contributions, since they are included in state income.

Normally, the HSA "employer contributions" (your employer's and your payroll deductions) are added back automatically by TurboTax to state income, so that if your state income includes the HSA contributions AND you see that TurboTax is also adding the amount back, then you must adjust the state income downward by the amount of the HSA contributions that are being included twice.

If you determine that in the state that the HSA contributions are being included twice, then find the income adjustments screen (most states have one) and delete one of these HSA contributions so that the state income will be correct.

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