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Form 540(CA) medical expenses reimbursed by HSA

dfa
Level 3

This is a repeat of an older question I found in ProConnect that wasn't quite resolved and applies to Lacerte as well. My client reimbursed himself for medical expenses incurred in prior years with his HSA. Lacerte assumes they are current year medical expenses and allows them for CA purposes because CA doesn't recognize HSAs. However, they weren't deductible as current year medical expenses because they were incurred in a prior year. I can't find an override for this issue. My work around is entering a negative CA only itemized deduction in Screen 25. Has anyone else addressed this another way?

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Karl
Level 8
Level 8

I've never found another workaround to that issue.  What you've described is how I get around it also.  That, or crossing fingers that the HSA distribution is less than 7.5% AGI. 😉

*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*

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Karl
Level 8
Level 8

I've never found another workaround to that issue.  What you've described is how I get around it also.  That, or crossing fingers that the HSA distribution is less than 7.5% AGI. 😉

*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*