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Why is my after tax contribution to hsa put as income to california taxes

California state tax seems to be taxing me on the full amount of the combined contribution of both me AND my employer, but presumably they should only be taxing the employer contribution amount.  I did not find a place in turbo tax to break it out or to edit the amount.

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Accepted Solutions
ChrisJ
New Member

Why is my after tax contribution to hsa put as income to california taxes

California doesn't conform to federal HSA provisions - HSA contributions are not tax deductible in the state. Here are all the differences: 

  1. A taxpayer taking an HSA deduction on a federal return must increase AGI by the amount of the federal deduction on the California tax return
  2. Interest earned on the account must be added to AGI on the California tax return; and,
  3. Any contribution to an HSA made by an employer on behalf of an employee is not excluded from income and must be added to the AGI of the employee on the employee’s California return.

View all differences at on page 10 here: https://www.ftb.ca.gov/forms/2016/16_1001.pdf

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1 Reply
ChrisJ
New Member

Why is my after tax contribution to hsa put as income to california taxes

California doesn't conform to federal HSA provisions - HSA contributions are not tax deductible in the state. Here are all the differences: 

  1. A taxpayer taking an HSA deduction on a federal return must increase AGI by the amount of the federal deduction on the California tax return
  2. Interest earned on the account must be added to AGI on the California tax return; and,
  3. Any contribution to an HSA made by an employer on behalf of an employee is not excluded from income and must be added to the AGI of the employee on the employee’s California return.

View all differences at on page 10 here: https://www.ftb.ca.gov/forms/2016/16_1001.pdf

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