How can I make sure that Turbo Tax does not include that HSA contribution ( W2 box 12c, code W) to State wages already which are already include that in my case.?

[BMcCalpin · Accepted solution]

If you are talking about California, the fact that your employer included the HSA contributions in box 16 doesn't make any difference.

While this number (state wages) appears on page 1 of form 540 on line 12, in fact, it is never used anywhere on the return.

The CA return starts with federal adjusted gross income (which includes the HSA exclusion), so CA has to back out the exclusion by adding the code W amount (from box 12 on the W-2) to line 1 of form CA(540), so that it can be an addition to CA income on line 16, form 540.

No further adjustment is necessary.

If you are talking about New Jersey, come back in the comments.

[kanujc]

Thanks. I was interested in CA only and this makes sense to me. My initial worry was that TurboTax will start CA state tax based on what was reported in State wages only.