Because New Jersey (NJ) does not allow the HSA contribution deduction you must add the earnings to your NJ return. Employer contributions to HSAs are included in NJ income and employee contributions are not deductible on the NJ individual tax return. But withdrawals from HSAs for medical purposes are deductible on the NJ tax return (subject to a 2% exclusion) as medical expenses.Add the interest, dividends and capital gains on the NJ return by following the instructions below. Sign into your TurboTax account/return > Select States tab > Continue or Edit your NJ return Continue until you reach 'You've Finished Your New Jersey Return' > Select Update beside Adjustments Continue to the page 'Other Non-Wage Income' Enter your description and amounts Continue to complete your NJ return See the image below.

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yanivi

Solved

How do I report HSA interest, dividends, and capital gains on the New Jersey Return?

Forum|Forum|5 years ago
April 11, 2021
2 replies
0 views

No text available

TurboTax Premier Online

Best answer by DianeW777

Because New Jersey (NJ) does not allow the HSA contribution deduction you must add the earnings to your NJ return.

Employer contributions to HSAs are included in NJ income and employee contributions are not deductible on the NJ individual tax return. But withdrawals from HSAs for medical purposes are deductible on the NJ tax return (subject to a 2% exclusion) as medical expenses.

Add the interest, dividends and capital gains on the NJ return by following the instructions below.

Sign into your TurboTax account/return > Select States tab > Continue or Edit your NJ return
Continue until you reach 'You've Finished Your New Jersey Return' > Select Update beside Adjustments
Continue to the page 'Other Non-Wage Income'
Enter your description and amounts
Continue to complete your NJ return
See the image below.

DianeW777Answer

Because New Jersey (NJ) does not allow the HSA contribution deduction you must add the earnings to your NJ return.

Employer contributions to HSAs are included in NJ income and employee contributions are not deductible on the NJ individual tax return. But withdrawals from HSAs for medical purposes are deductible on the NJ tax return (subject to a 2% exclusion) as medical expenses.

Add the interest, dividends and capital gains on the NJ return by following the instructions below.

Sign into your TurboTax account/return > Select States tab > Continue or Edit your NJ return
Continue until you reach 'You've Finished Your New Jersey Return' > Select Update beside Adjustments
Continue to the page 'Other Non-Wage Income'
Enter your description and amounts
Continue to complete your NJ return
See the image below.

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yaniviAuthor

I ended up putting HSA dividends into the "Dividend Income" page. This way it was reported on line 17 "Dividends".

deeMatrix

Employee

How did you do this? When entering the HSA dividend info on Line 17 Dividends of 1040 form in TurboTax it does not include the description I entered or the dividend amount on the Schedule B Part 2 Ordinary Dividends section.

AmyC

Employee

The additional NJ income should not go on the federal. It should be entered into NJ as described above by @DianeW777

@deeMatrix

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

deeMatrix

Employee

Yes we are aware of this but trying to see how this individual was able to have the additional HSA dividend income be entered on the NJ tax form so it goes on Line 17 versus Line 26.