California - HSA Contribution by Employer Code on Form W-2
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Employer contributions to a Health Savings Account (HSA) are reported on Form W-2, Box 12, using Code W. Because California does not follow federal HSA rules, these employer contributions must be added back to your California income. When you enter your W-2 in TaxAct, the amount reported with Code W flows to Schedule CA (540), Part I, Line 7, Column C, as an addition to income. It is then included in the calculation of California adjusted gross income on Form 540, Line 16.