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March 28, 2025
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Medical Expenses Paid With HSA - Calfornia Return

  • March 28, 2025
  • 1 reply
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California does not recognize Health Savings Accounts.  Therefore medical expenses paid with an HSA are still deductible on California returns, even though they are deductible on the Federal return.  How can I enter this adjustment in TurboTax?  This seems like a very big gap.  

    Best answer by BillM223

    TurboTax handles HSA actions (contributions and distributions) on the CA return automatically. The only thing you have to do is enter in the CA interview the interest, dividends, and capital gains for your HSA (because your HSA is considered just an investment fund in California). 

     

    Otherwise, you have nothing to do for your HSA in California. Please do not try to make your own adjustments. If you have questions about what TurboTax actually did, come back and ask.

    1 reply

    BillM223Answer
    March 28, 2025

    TurboTax handles HSA actions (contributions and distributions) on the CA return automatically. The only thing you have to do is enter in the CA interview the interest, dividends, and capital gains for your HSA (because your HSA is considered just an investment fund in California). 

     

    Otherwise, you have nothing to do for your HSA in California. Please do not try to make your own adjustments. If you have questions about what TurboTax actually did, come back and ask.

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