Question

Schedule CA Adjustments HSA Distributions

Forum|Forum|1 year ago
March 17, 2025
1 reply
0 views

We took HSA distributions in 2024 covering several years' worth of expenses. On Schedule CA, under Medical & Dental Expenses and HSA Distributions Smart Worksheet, the software calculated that we could take a deduction of the distribution amounts (less 7.5% of AGI). Is this OK? If not, how do I correct it? Also, how can I add 2024 Medigap premiums not reimbursable by HSA to IRS Schedule A so that they carry over to Schedule CA line H?

TurboTax Home & Biz Windows

B

BillM223

"Also, how can I add 2024 Medigap premiums not reimbursable by HSA to IRS Schedule A so that they carry over to Schedule CA line H?"

Are you saying that you are not 65 years of age? Normally, you would add these premiums to Schedule A on the 1040. Then they would flow to the CA return.

"On Schedule CA, under Medical & Dental Expenses and HSA Distributions Smart Worksheet, the software calculated that we could take a deduction of the distribution amounts (less 7.5% of AGI). Is this OK?"

Honestly, in California, I doubt that it is. However, on the federal return, the IRS explicitly allows you to pay from your HSA expenses that are several years old, which normally would not be allowed ( they are normally deductible in the year in which you actually paid the expense).

But the California Instructions for form CA state: "Health Savings Account (HSA) Distributions – If you received a tax-free HSA distribution for qualified medical expenses, enter the qualified expenses paid that exceed 7.5% of federal AGI on line 4, column C."

Clearly, the rules for an HSA allow for you to reimburse yourself for medical expenses from years before, so either the author of these instructions does not know this or does not care.

My suggestion - you are free to accept it or not - is to let TurboTax do its thing, but to document this, in case anyone ever asks.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

C

cmtemcaAuthor

Thanks for the information. We are over 65. I was unable to add the Medigap premiums (which are not eligible for HSA reimbursement, unlike Medicare Part B and D premiums) to schedule A. I guess that's because we are taking the standard deduction for IRS. However, I did find the information on the ftb.ca.gov website on taking the deduction for qualified medical expenses on the California return, so I am doing that. It still seems counter-intuitive, but maybe it's because the original contributions were not deductible??