CHECK OUT YOUR STATE’S TAX LAWS ON HSAs

The federal government does not tax qualified HSA contributions but some states do. This is due to states defining income differently than the IRS. Therefore, some income that may be tax-free at the federal level may not be at the state level. Also, states that do not charge their residents income taxes have difficulty providing state tax breaks for HSA holders.

Currently, all but a few states now conform to the federal Internal Revenue Code’s treatment of HSAs.  The following map highlights states where taxation of HSA contributions may differ.  When in doubt please check with the organization from which you plan to purchase your HSA, or your state’s department of revenue.