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February 21, 2024
Question

definition of medical expense differs between IRS and HSA causing state reporting problem

  • February 21, 2024
  • 2 replies
  • 0 views

There are differences between what the IRS and HSA plans consider to be eligible medical expenses, for example the HSA rules allow for over the counter drug items without a prescription but the IRS does not.  The IRS accepts medicare supplement insurance (ie Medigap) but the HSA does not.  There are other differences.

On the federal return I understand that I can make adjustments to the reported deduction amounts to fix this.  However I am having problem with the state return (in my case California) because California does not allow a deduction for HSA contributions and therefore I should be able to report my total medical expenses without a reduction for HSA distributions.  Turbotax brings over my reported medical expenses reduced by the HSA distributions, but I need to report the total amount of IRS accepted medical expense.  How do I do this?

    2 replies

    February 21, 2024

    Would you be able to send me a diagnostic copy of your return so we can further investigate this issue?  You can do this by taking the following steps:

    TurboTax Online

    Tools

    Tax Tools

    Share My File with Agent

    then note the token number and respond to me with the number

    TurboTax Desktop

    Online

    Send Tax File to Agent

    Send

    Then respond with the token number to this message

    The diagnostic copy does not include any of your personal info, it just includes numbers and forms so we can help solve the issue. 

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    SharonD007
    March 5, 2024

    We recreated a tax return with this scenario and tested it. The HSA payments are handled on the CA Schedule CA, and are allowed on the state return even though not allowed on the federal.

     

    If you still have an issue, please send us a diagnostic copy of your return.

     

    @caligirl1 

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