My California state tax return added my HSA contribution to income because, as TT said, CA doesn't allow "employer" contributions to HSA as deduction - it was my cont.

[rjnewman1]

This was a personal contribution to HSA not employer contribution.

[BMcCalpin]

The message is correct. The IRS considers any contributions made by your employer OR made by you by means of a payroll deduction scheme to be "an employer's contribution".

The rationale is that both amounts are pre-tax. This amount is found with code "W" in box 12 on your W-2.

Since California does not allow the exclusion of HSA contributions from state income, the amount is added back to your federal income for purposes of the state.

The confusion is rooted in how the IRS uses the terminology,and TurboTax has to follow that terminology.

[rohitshetti]

The problem is CA adds post-tax contributions also as State Income.

[BMcCalpin]

Ah. When you said "personal" contribution, I assumed you meant it the way that most taxpayers mean it - the amount of payroll deduction you made. But I guess you meant contributions you made directly to the HSA. I will have to build a test case, and report it if I can reproduce it. Thanks for the comment.

[araibeach]

But if I am a resident of another state and only worked in California for a certain period of time, then the entire amount in box 12 of the W-2 should not be added back to my California state return. Only the portion for the period of time spent in California should be added back, right? Turbotax right now is adding back the whole portion. That seems wrong??

[amortman14]

@araibeach - did you ever get an answer to this question as I'm running into the same issue. The CA state is counting my employer's HSA contribution from my W2 from Georgia and AFTER I left CA which I agree seems incorrect. Please advise if you got an answers on this...

[LCircuit]

Still Turbotax should be clearly indicating what employer contribution means on California tax screens help (It doesnt have to use IRS terminology on state associated help items). In fact turbotax does clarify on Federal screens help that W2 amount could be employee contributions as well as employer and IRS calls it employer contribution, however when user comes to CA forms it leaves users confused by referring just 'employer contribution' leaving ambiguity of interpreting CA rules. It should mention in the help that irrespective of employee contributions to amount indicated on W2, CA taxes entire amount.

[swanpatty56]

I have had the same situation  with my 2019 return.  I can't find an answer to fix this.  Did you ever get resoltuion?

[BillM223]

@swanpatty56

I will be happy to help you with CA and HSAs, but I need for you to state your exact question - the comments above are all over the place.

How did you make you CA contributions (through your employer or directly)? Were you living or working in CA when you did this? What do you see on the CA return that concerns you?

[kellibazanmiller]

@BillM223 Hello, I am not sure if the overall question was answered (or if it was re-stated as requested) but I will give it a shot - as I am in a similar situation.

I have 2 W2's for 2019....one when I was employed in Texas and one where I was employed in California.

For the job where I was employed and living in Texas: The W2 box 12 has a W code entry: "Employer Contributions to HSA" with an amount of $500.

For a little over a month in 2019 I was also employed in California at a different company. This employer did not contribute to an HSA, and the values in box 12 is completely empty. 

I am working on my California state taxes, and they are pulling the box 12 value from the other/incorrect W2 when I was working in Texas - and I am not able to change that amount in TurboTax.

Is this correct?? If so, I owe around $500 in California state taxes....and only earned $1600 while there!

[Opus 17]

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@kellibazanmiller wrote:

@BillM223 Hello, I am not sure if the overall question was answered (or if it was re-stated as requested) but I will give it a shot - as I am in a similar situation.

I have 2 W2's for 2019....one when I was employed in Texas and one where I was employed in California.

For the job where I was employed and living in Texas: The W2 box 12 has a W code entry: "Employer Contributions to HSA" with an amount of $500.

For a little over a month in 2019 I was also employed in California at a different company. This employer did not contribute to an HSA, and the values in box 12 is completely empty. 

I am working on my California state taxes, and they are pulling the box 12 value from the other/incorrect W2 when I was working in Texas - and I am not able to change that amount in TurboTax.

Is this correct?? If so, I owe around $500 in California state taxes....and only earned $1600 while there!

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Where did you live in 2019, what is your state of residence?  Is your CA return for a full-year resident, a part-year resident, or a non-resident?

[mlw530]

I have the same related question.

I live and worked full year in WA but have a rental home in CA. On my CA form, it counted the HSA employer and my contribution as income and also is asking me for the year’s interest, dividends and net gain/loss. Do I actually have to file that for CA given I worked entire year in WA?

[Opus 17]

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@mlw530 wrote:

I have the same related question.

I live and worked full year in WA but have a rental home in CA. On my CA form, it counted the HSA employer and my contribution as income and also is asking me for the year’s interest, dividends and net gain/loss. Do I actually have to file that for CA given I worked entire year in WA?

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You need to be filing a CA non-resident return to only report your CA in-state income, not all your income.  Did you accidentally start a resident return?  In the personal interview when you entered your WA address Turbotax should have asked if you lived in any other states and did you have income in other states, and should have opened a non-resident return for you.

@VolvoGirl are you familiar with this situation?

[VolvoGirl]

Sorry no.  Not multiple state questions.

[Opus 17]

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@VolvoGirl wrote:

Sorry no.  Not multiple state questions.

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I thought you were a California girl 🙂  Maybe I misremembered.  

Hmm.  Maybe @Hal_Al or @Critter-3 or @DoninGA