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April 13, 2025
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I contributed $7,600 pre-tax to my HSA and my employer contributed $1,700 to my HSA. However, California seems to be taxing the entire amount of $9,300. How do I fix it?

  • April 13, 2025
  • 1 reply
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    Best answer by dmertz

    This is correct behavior.  Because California does not recognize HSA as being excludible from taxable income, the $9,300 excluded from your federal AGI must be added back on your California tax return when determining your California AGI.  California treats an HSA as if it was an ordinary savings account.

    1 reply

    dmertzAnswer
    Employee
    April 13, 2025

    This is correct behavior.  Because California does not recognize HSA as being excludible from taxable income, the $9,300 excluded from your federal AGI must be added back on your California tax return when determining your California AGI.  California treats an HSA as if it was an ordinary savings account.