Is the Georgia High Deductible Health Plan deduction include just the annual premium? Does the deduction also include your HSA contributions?

[BMcCalpin · Accepted solution]

The Georgia High Deductible Health Plan deduction includes only the HDHP premiums that are not already accounted for on the federal return.

However, since the HDHP premiums are normally not taxed at the federal level (they are reported with code "DD" in box 12 on the W-2), you don't need to enter them on the Georgia return, because this effect carries through to the Georgia income for state purposes from the federal return.

Therefore, you are unlikely to need to enter anything in this field on the Georgia return.

The Georgia instructions say

"The amount [for the premium and HSA expenditures] may only be deducted to the extent the deduction has not been included in federal adjusted income and the expenses have not been provided from a health reimbursement arrangement and have not been included in itemized deductions." See the Georgia instructions.

[jiabgwh]

The 2017 package only specifies "Enter up to 100% of your annual premium as long as: 1) you didn't deduct these expenses as an itemized deduction and 2) your payments didn't come from a health reimbursement account.

I don't meet disqualification #1. As far as #2 goes, I realize that the HDHP premium lowers the AGI, but strictly speaking it is not part of federal itemized deductions either right? If that's the case, should I enter my premium, or do the instructions in the product this year need an update?

[Anonymous]

Can you please suggest what needs to be done in this case. Even I fall under same category.

[elizabethripley]

Has anyone gotten an answer on this?

[kknox1]

You don’t report it again if it is paid pretax. You’ve already received a tax break on it so you cannot legally report it for an additional tax break.

[cb5341]

I think the intent of the GA law is that you should NOT subtract HDHP premiums from Georgia income if they were paid with pre-tax money, but the GA tax instructions are very unclear and seem to say the opposite. Shame on them for not explaining the rules clearly.

[matt306]

I would add an additional scenario...

What if the employee contributes to the employer-sponsored plan? The employer pays the (benefit) premium which is shown on W-2 Box 12 Code DD which is not taxable.

An "employee-required required contribution" is reported on the 1095-C as her portion of her annual proof of medical insurance. I believe her monthly contribution uses after-tax money. But is it considered a "premium" at this point which would allow it to be deductible on the GA Tax return?

Thanks in advance for any insights you might have.

[davidscottkaplan]

From July - November, my HDHP insurance was covered through a COBRA plan. I paid these COBRA premiums from my HSA. Do these payments count towards the Georgia HDHP deduction? I presume they do not, based on other posters notes that the spirit is to not include 'pre-tax' health payments. 

[BillM223]

You are correct; the payments for your COBRA premiums do not apply to the Georgia HDHP deduction.

You are allowed to use your HSA to pay for health care premiums when you have COBRA; however, since the dollars in your HSA are already tax-advantaged, you can't use them on the Georgia return this way. You already got the tax benefit in Georgia in the year you made the HSA contributions that eventually paid for the HDHP premiums, and the HSA contributions flowed through to the Georgia return as a reduction to federal adjusted gross income.

[davidscottkaplan]

Thanks for the reply. If the Cobra premium were paid out of a traditional checking account, would it qualify for the deduction? 

[BillM223]

Only if the COBRA policy was an HDHP. You would have to look at the policy (or call the insurance carrier and ask) to see if it an HDHP. If so, then this is exactly what Georgia had in mind.