PA - Health Savings Account Conformity

From TaxAlmanac

Pennsylvania Health Savings Accounts

Pennsylvania does not conform to the portion of §223 of the IRC that permits eligible individuals to establish Health Savings Accounts (HSA’s) for taxable years beginning on or after January 1, 2004. This was added in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. For federal purposes, HSA contributions are deductible from AGI, the contributions grow tax-free over the years, and amounts can be distributed tax-free to pay or reimburse qualified medical expenses.

Pennsylvania does not include the HSA deduction claimed on the federal return (Form 1040, Line 28) on the return as a subtraction from income. Earnings from an HSA are taxed on Form PA-40.