Health Savings Accounts offer generous deductions on Federal income tax for any deposits made to the account.  Most states also offer the same deductions on state income taxes.  However, since Health Savings Accounts were set up as a federal program, the individual states can choose to comply with the federal guidelines concerning tax treatment of Health Savings Accounts, or establish their own rules.

Please see the charts below for the tax treatment of your state.  Select your state to see their official website.

• These states have indicated they will follow the tax treatment established by the federal government for Health Savings Accounts, offering deductions on state income taxes for contributions to Health Savings Accounts.

States that follow federal tax treatment Arizona Indiana Mississippi Oklahoma Arkansas Iowa Missouri Oregon Colorado Kansas Montana Pennsylvania Connecticut Kentucky Nebraska Rhode Island Delaware Louisiana New Mexico South Carolina Georgia Maine New York Utah Hawaii* Maryland North Carolina Virginia Idaho Massachusetts North Dakota Vermont Illinois Michigan Ohio West Virginia - Minnesota - Wisconsin

*	Hawaii's Act 89 (2004) conforms state taxes with federal law, as amended to Dec. 31, 2003.  Health Savings Accounts are included.  See HI-Ann. 2004-02.

• These states have indicated that they must pass state legislation before Health Savings Accounts will receive a tax benefit at the state level.

States that must pass legislation at the state level Alabama California New Jersey

• Individuals from these states are not taxed on income at the state level.

States not affected by federal income tax guidance Alaska Nevada Texas Florida South Dakota Washington New Hampshire Tennessee Wyoming

• HSA holders from these states may have to pay state income taxes on interest or dividends earned in their HSA.

States that do not tax income, but do tax dividends and interest New Hampshire Tennessee -

• Currently, only Washington DC has not indicated their position on Health Savings Accounts:  We do not yet have information on whether they will offer deductions on state income tax for HSA contributions.

This information was last updated on 9/3/2011.

Disclaimer: HSA for America and its affiliates are not engaged in rendering tax, investment or legal advice.  The information on this page may have inaccuracies, and federal and state tax regulations are subject to change.  If tax, investment or legal advice is required, seek the services of a licensed professional.