Reading the fine print on HSAs

Residents of California and six other states who have enrolled in health savings accounts may get a shock when tax time rolls around, the Los Angeles Times reports. Health savings accounts allow users to shield as much as $5,540 before federal taxes to pay for out-of-pocket expenses. California is among the states that have refused to honor the exemption for the new high-deductible plans. As a result, many Californians will find their state taxable income is thousands of dollars higher than their federal income. State legislators George A. Plescia (R-San Diego) and Abel Maldonado (R-Santa Cruz) have drafted legislation that would change California's law. Other states that have yet to pass tax breaks for HSAs include Wisconsin, Alabama, Pennsylvania, New Jersey, Massachusetts and Maine.

- see this article from the Los Angeles Times