State taxes for HSAs

Are contributions to health savings accounts tax-deductible for state taxes? It depends.

Updated over a week ago

Federal income taxes:

  • Offer deductions for contributions to health savings accounts and

  • Doesn't tax HSA growth (dividends or interest)

However, states have their own taxes and may tax health savings account contributions or growth. Below is the most accurate information we have as of March 2024.

Consult with a tax professional

We always recommend that you consult with a tax professional; this is not intended to provide tax or investment advice.

States with income taxes that follow federal HSA tax treatment

These states have income taxes, but they follow federal HSA tax treatment and

  • Treat HSA contributions as tax-deductible and

  • Do not tax HSA growth.

Alabama

Arizona

Arkansas

Colorado

Connecticut

Deleware

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

Utah

Virginia

Vermont

West Virginia

Wisconsin


States with income taxes that do not follow federal HSA tax treatment

These states have income taxes but do not follow federal HSA tax treatment. They

  • Don't consider HSA contributions tax deductible, and

  • Tax HSA growth (interest and dividends).

California

New Jersey

States without income tax and don't tax HSA growth

These states don't even tax income, so there is no income tax deduction for HSA contributions. (Because there is no income tax.) These states also do not tax HSA growth (interest or dividends).

South Dakota

Florida

Nevada

South Dakota

Texas

Washington

Wyoming

States without income tax but tax HSA growth

These states don't have an income tax, so HSA contributions are not taxed as a part of taxable income. However, they do tax dividends and interest on health savings accounts.

New Hampshire*

Tennessee**

*for earnings over $2400 in a year, or $4800 if filing jointly.

**for earnings over $1,400 in a year, or $2500 if filing jointly.

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