IS THE W-2 BOX 12 CODE W ,ALREADY INCLUDED IN NJ BOx16 WAGES

[Dubostica]

 1) Is the amount from box 12 code W  ( contributions to HSA )already in box 16 for  NJ  state ?  Is adjustment needed?                                

 2) 1099-SA gross  distributions $2000.00 All USED to pay for Doctor  visits and medication. Can this be used (DEDUCTED using worksheet F) on NJ return as medical deduction since i hear only special Doctor visits can be written of on NJ TAX RETURN?

[MaryK4 · Accepted solution]

The HSA contributions should be included in Box 16.  You can compare your Federal Wages (Box 1) to your NJ State Wages (Box 16). If the NJ amount is higher by exactly the amount in Box 12 Code W (plus potentially other items like 403(b) or 457 contributions), then your employer has already made the adjustment.  If Box 16 already includes it, no further adjustment is needed on your New Jersey wages line.  If Box 16 does NOT include it, you must make the adjustment (this would be extremely unlikely).  

Yes, you can deduct for a New Jersey medical expense. They are deductible to the extent that your total medical expenses exceed 2% of your NJ Gross Income.   TurboTax should display a screen for Medical Expenses where your HSA distribution amount ($2,000) is already listed on the first line.

[Dubostica · Accepted solution]

just to clarify : SO I used money from HSA distributions and still can deduct them as medical expense?? 

[BillM223 · Accepted solution]

Yes, for purposes of your New Jersey return. You could not exclude the HSA contributions from New Jersey state income, so you can deduct medical expenses paid for with HSA funds on the New Jersey return. Why? Because as far as New Jersey is concerned, the HSA is just a savings account set aside to pay for medical bills.

It seems odd, but you just have to mentally separate the HSA on the federal return from the HSA on the New Jersey return.