CA HSA problem

Forum|Forum|4 years ago
February 28, 2022
1 reply
10 views

The 2021 HSA distribution for prior years medical expenses (2018-2020) are automatically included as current year medical expenses for CA itemized deductions. There doesn't seem to be anywhere to override this.

Lacerte Tax

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K

Karl

Intuit Community Champion

Where are you inputting that these are 2018-2020 medical expenses? I don't see Lacerte asking whether HSA-reimbursements are for CY or PY.

This is how I input HSA distributions, and nothing is showing up on CA540.

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S

suswinAuthor

Level 2

I have input my HSA distributions the same way you have, but mine are 15,000 which exceeds the 7.5% of AGI, thereby triggering medical expenses for itemization purposes. Because Lacerte does not allow you to enter which years the HSA distributions are related to, it automatically assumes the current year.

K

Karl

Intuit Community Champion

Wow, I upped mine to $15K and see what you're talking about now. I tried negative entries on Screen 25, no luck. I even tried adding a non-income-tax state like TX and sourcing the distribution there, but it still didn't take it off.

I think you'll need to call support and see if they can submit it for fixing.

I can see why it's flowing that why, like you said, the software presumes you'd submit for reimbursement from your HSA right away. But that's not ideal HSA tax optimization. Let it grow, invested tax free! 🙂

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