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February 14, 2020
Question

Tax Year Prior to 2020: Calfornia HSA Contributions

  • February 14, 2020
  • 1 reply
  • 0 views

I contributed into a HSA for 2019 outside of payroll deduction.  I am getting my deduction Federally adjusted upon filing.  When I got to the California returns, it appears that TurboTax might have added what I contributed post tax into income on the California side. It appears that I may have added extra income when that was not the case.  Is this right? How can I take that contribution out on the California side?

    1 reply

    February 14, 2020

    TurboTax is correct.  Because the state of California does not recognize HSAs, your HSA contributions are not tax deductible for California state income tax.

    • Your HSA contribution will be deducted from your gross pay for calculating the federal tax withholdings.
    • It will not reduce your California state income tax withholding.
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    March 9, 2020

    I contributed to HSA outside of work.  After I entered the HSA contribution the amount of Fed tax owed decreased, which is great.  Why does the amount of California State tax owed increased by 70%? 

    March 9, 2020

    Yes, unfortunately, California taxes HSA contributions and the Long Term Capital Gain is considered a contribution.

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