Question

amar Jackson (50) took a distribution of $4,800 from his health savings account (HSA) to pay for qualified medical expenses. Jamar's federal adjusted gross income (AGI) is $52,930. He is itemizing deductions on his federal return, but has no medical expense deduction because all of his medical expenses were paid with the funds from his HSA. What adjustment would you make on his California return?

Since Jamar paid for all of his medical expenses using pre-tax dollars, he cannot include those expenses on his tax return.


Jamar has deductible medical expenses for his California return. Calculate the amount by first subtracting the 7.5% of his AGI. He can deduct $830 on his California return.


Jamar can include the $4,800 of qualified medical expenses as an itemized deduction on his California return.


Jamar cannot make any adjustment on his California return.

Answer 1

Answer: Jamar has deductible medical expenses on his California return — he can deduct $830.

Explanation/calculation: California does not conform to the federal HSA exclusion, so amounts paid with an HSA are treated as after‑tax for CA and may be claimed as medical expenses subject to the 7.5% of AGI floor. 7.5% of AGI = 0.075 × $52,930 = $3,969.75. Deductible portion = $4,800 − $3,969.75 = $830.25 → $830 (rounded).