HSA Tax Checklist
Document checklist for Health Savings Account contributions, distributions, and NJ non-conformity.
Tax-year note: figures marked TY2025 apply to returns filed in 2026; figures marked TY2026 apply to the current tax year (returns filed in 2027).
Quick Answer
- For HSA tax filing, gather your W-2 showing Box 12 Code W (employer + pre-tax contributions), Form 1099-SA for distributions, Form 5498-SA for total contributions, and receipts for qualified medical expenses. NJ does not recognize HSAs - contributions are not deductible and investment earnings are taxable annually on your NJ return.
Your Progress
0 of 25 items completeSection 01
HDHP Enrollment Verification
Section 02
Contribution Documents
Section 03
Distribution Documents
Section 04
NJ Non-Conformity Items (Critical)
Section 05
Special Situations
Frequently Asked Questions
Why does NJ not recognize my HSA?
NJ is one of only two states (along with California) that does not recognize HSAs for state income tax purposes. This means contributions are not deductible, investment earnings inside the HSA are taxable annually, and your NJ wages (W-2 Box 16) will be higher than your federal wages (Box 1) because HSA contributions are included.
What happens to my HSA when I enroll in Medicare?
Once enrolled in Medicare (Part A, B, or D), you can no longer make new HSA contributions. However, you can still use existing HSA funds tax-free for qualified medical expenses, and you can pay Medicare Parts A, B, C, and D premiums from your HSA tax-free (but NOT Medigap premiums).
What is the 20% penalty on HSA distributions?
If you take an HSA distribution for non-qualified expenses, you owe ordinary income tax plus a 20% additional penalty under IRC Section 223(f)(4)(A). The penalty does not apply after age 65, for disability, or upon death - after age 65, the HSA functions like a Traditional IRA for non-medical use (income tax only, no penalty).
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