2011 Treatment of Health Savings Accounts

2011 Wisconsin Act 1 adopted the federal treatment of health savings accounts (HSAs) for Wisconsin. The Wisconsin treatment of HSAs will be the same as the federal treatment, effective for taxable years beginning on or after January 1, 2011.

For example,

For federal tax purposes for taxable years beginning on or after January 1, 2011, there is an additional 20% tax on distributions not used for qualified medical expenses (except in the case of disability, reaching age 65, or death). If an individual is subject to this federal penalty, there is a Wisconsin penalty equal to 33 percent of the federal penalty.

Information on the 2010 treatment of HSAs and on how individuals should report the differences between the federal and Wisconsin law is available on the department's website at www.revenue.wi.gov/taxpro/news/2008/080212.html.

Page last updated February 23, 2011