Compliance October 20, 2005

CA Tax Conformity Bill Excludes HSAs

October 20, 2005 (PLANSPONSOR.com) - Despite early indications that a new California law would make the Golden State's tax laws conform to the federal tax code when it came to taxing of health savings accounts (HSA), the bill does not make that change.
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A note on the Web site of California Assemblyman Johan Klehs, General Assembly sponsor of AB 115, said the measure would better conform the state’s tax practices to those at the federal level in areas such as deductions for child care and other related expenses.

Klehs said the measure also includes tax credits for costs related to retrofitting refineries to produce ultra-low sulfur diesel fuel and increased opportunity for members of the Armed Services serving outside of California to qualify for the Child and Dependent Care Credit.

However, the Klehs note specifically mentions HSAs as not being in step with the federal Internal Revenue Code.

The bill as it was approved by the Legislature and signed into law by Governor Arnold Schwarzenegger is  here .

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