HSA Earnings in California

Forum|Forum|5 years ago
March 8, 2021
2 replies
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The TurboTax screen for filing with an HSA in California asks me for the following information. There's no information on where I should pull these values from - is it my December statement, or do I add up the values for the whole year? It's not in my 1099-SA or 5498-SA.

Interest earned from HSA
Dividends earned from HSA
Net capital gain or loss from HSA

BillM223

The 1099-SA and the 5498-SA are federal forms for HSAs.

However, California does not recognize the special nature of HSAs as pre-tax medical accounts. Instead, California insists that you treat the HSA as a regular investment account (i.e. taxable).

I doubt that any of the statements that you received from the HSA custodian has the information you need.

Instead, you need to contact your HSA custodian and ask to speak to a customer service rep who deals with customers in California and New Jersey (the other state that doesn't recognize HSAs). I have to hope that someone at your HSA custodian understands the situation and tell you what interest, dividends, and capital gains you would have earned had the HSA not been tax-sheltered.

If no one at your HSA custodian knows what I am talking about - switch to another custodian preferably based in California so they know what I am talking about.

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CGeiger

@ BillM223

I live in California. I am using TurboTax Online Premier. I can not find where to review and edit the interest, dividend and capital gains from my HSA account, within Turbotax, so that it is included as taxable income on my state tax return. Could you provide more detailed information; i.e. a step-by-step procedure on where to find this information in this version of TurboTax?

Thanks,

Curt

BillM223

Proceed through the California interview. You will come to a screen with the heading "Here's the income that California handles differently".

Scroll down to the subheading "Investments", and click on Start for "Health Savings Account (HSA) Earnings".

The very next screen will ask you about interest, dividends, and capital gains from your HSA.

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shiyi11

If you are a HealthEquity for HSA user, follow this

https://ttlc.intuit.com/community/taxes/discussion/re-calculate-hsa-net-capital-gain-or-loss-for-ca-tax-purposes/01/3035510/highlight/true#M1107810

Weasley_

I talked to the HSA rep who showed me a calculator for capital gain! You just have to download that report and upload it to the calculator. Hopefully this helps others:

https://learn2.healthequity.com/google/hsa/investment-income-calculator