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High deductible health plan state deduction

Forum|Forum|6 years ago
June 1, 2019
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My state (Georgia) allows for you to deduct your HDHP from your state taxes. From what I read, it sounds like you CAN'T do this, if it is taken out of your overall federal income. So, my HDHP is paid BEFORE taxes, therefore that means I can NOT deduct it from my state? Just want to clear this up. THanks

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Best answer by DanielV01

You are correct. I'd like to commend you on the excellent research you did on this, because the wording on the Georgia statute can sound a bit confusing. Here is the important part quoted word-for-word:

"20. An amount equal to 100 percent of the premium paid by the taxpayer during the taxable year for high deductible health plans as defined by Section 223 of the Internal Revenue Code. The amount 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." (Italics added)

The deduction is included in your Federal Adjusted Income if you paid for it with pre-tax dollars, because it has already reduced your taxable income. In short, Georgia will not let you take two deductions for the monthly premiums you are paying for your health insurance.

K

kesldwyer

Does using an HDHP from the government Healthcare system (Obamacare) qualify for these Georgia deductions? Also, these "contributions" include premiums, medical, & prescription expenses, right?

DanielV01Answer

Employee

You are correct. I'd like to commend you on the excellent research you did on this, because the wording on the Georgia statute can sound a bit confusing. Here is the important part quoted word-for-word:

"20. An amount equal to 100 percent of the premium paid by the taxpayer during the taxable year for high deductible health plans as defined by Section 223 of the Internal Revenue Code. The amount 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." (Italics added)

The deduction is included in your Federal Adjusted Income if you paid for it with pre-tax dollars, because it has already reduced your taxable income. In short, Georgia will not let you take two deductions for the monthly premiums you are paying for your health insurance.

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W

wxdude

Could you be more specific for folks who are self-employed? I had a high-deductible ObamaCare plan in 2016. On line 29 of form 1040 there is an amount equal to most of my paid premiums under "Self employed health insurance deduction." I also received a small premium tax credit (presumably for overpayment of health care premiums). May I also take the full deduction for High Deductible Health Plan Contributions on my Georgia tax return?

DanielV01

Employee

I apologize I didn't see your comment. The Obamacare Health Insurance is a perfect example of what IS deductible, because you do have to pay these out-of-pocket. If you receive subsidies (Premium Tax Credit), you reduce the amount you paid by additional PTC you get on your tax return or it increases if you have to pay back excess Premium Tax Credit you received. This GA deduction is based on the payment of healthcare premiums only, since HSA contributions are already deducted from your Federal AGI.

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K

KeshaH

Typically, if your HSA is funded through payroll deductions, it's pre-tax which means you wouldn't get a deduction. However, you can verify this with your employer to be sure.