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March 17, 2021
Question

Why does my California tax increase when I enter my HSA individual contributions?

  • March 17, 2021
  • 1 reply
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I personally funded $1390 into my HSA, and my Federal taxes decreased (to be expected), but my CA taxes increased by $79? I know I don't get deductions from my CA taxes for HSA contributions, but I don't understand why it increased?

1 reply

March 17, 2021

When you add your HSA, it is subtracted from your federal income to reflect the deduction .  California uses the federal adjusted gross income so on the California side that same amount is added back to income.  

 

INCOME                   $1000              

HSA  DEDUCTION  -$100

FED AGI                    $900

 

CALIFORNIA 

FED AGI                    $900

HSA ADDBACK         +$100

CA AGI                      $1,000