HSA Contribution being added to CA income

[sudsrini]

Hi,

With this bill passed in CA senate, shouldn't turbo tax exclude HSA contributions on CA return just like federal ?

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB230

Thank you

[DawnC · Accepted solution]

No, the bill has to pass through all levels of the California legislature before it becomes law.   As of today, the State of California still requires HSA contributions to be added back to income.  They are not tax-deductible in CA.  From the CA Franchise Tax Board:  

• Federal law allows a deduction for contributions to an HSA account. California law does not conform.  Enter the amount from line 13, column A, on line 13, column B.
• Distributions from an HSA not used for qualified medical expenses, and included in federal income, are not taxable for California purposes. Enter the distribution not used for qualified medical expenses on line 8f, column B.

TurboTax will handle these adjustments on the California return.