If I contribute post-tax money to an HSA in California, Is the amount I contribute fully deductible for federal taxes? Does CA stick its mittens into the pot and try to prevent or get more of my money thru fines or other theatrics for this scenario, or do they play nice?
You'll need to sign in or create an account to connect with an expert.
While you get a federal deduction you don’t get one on your California return.
The other thing that happens is that, interest or investment gains are taxable.
California treats HSA like a regular broker investment account. You don't get a deduction for contributions. If you make a withdrawal for any reason, you pay tax on the earnings that you withdraw (interest or capital gains, depending on the HSA), but you don't pay tax on the principle.
The one time this is an advantage is that if you make a withdrawal that is federally taxable (a withdrawal not used for medical expenses), California will only tax any interest or gains and not the entire amount like the IRS will.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
ccthealias
Level 2
Zek
New Member
javatax14
New Member
laurazelman-gmai
New Member
ganeshhegde
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.