HSA Tax Benefits by State (2026)
Most states follow federal HSA tax treatment, but a few notable exceptions (California, New Jersey) don't recognize HSA benefits at the state level.
States Without HSA Tax Benefits
These states do not recognize HSA tax benefits at the state level. You still get federal HSA tax benefits.
No State Income Tax
These states have no income tax, so HSA funds are automatically tax-free at the state level.
Full HSA Tax Benefits
These states follow federal HSA tax treatment — contributions are deductible, growth is tax-free, and qualified withdrawals are tax-free.
Alabama (AL)
2%–5%
Arizona (AZ)
2.5%
Arkansas (AR)
2%–4.4%
Colorado (CO)
4.4%
Connecticut (CT)
3%–6.99%
Delaware (DE)
2.2%–6.6%
District of Columbia (DC)
4%–10.75%
Georgia (GA)
5.49%
Hawaii (HI)
1.4%–11%
Idaho (ID)
5.695%
Illinois (IL)
4.95%
Indiana (IN)
3.05%
Iowa (IA)
4.4%–5.7%
Kansas (KS)
3.1%–5.7%
Kentucky (KY)
4%
Louisiana (LA)
1.85%–4.25%
Maine (ME)
5.8%–7.15%
Maryland (MD)
2%–5.75%
Massachusetts (MA)
5% + 4% surtax on income >$1M
Michigan (MI)
4.25%
Minnesota (MN)
5.35%–9.85%
Mississippi (MS)
4.7%
Missouri (MO)
2%–4.8%
Montana (MT)
4.7%–5.9%
Nebraska (NE)
2.46%–5.84%
New Mexico (NM)
1.7%–5.9%
New York (NY)
4%–10.9%
North Carolina (NC)
4.5%
North Dakota (ND)
0%–2.5%
Ohio (OH)
0%–3.75%
Oklahoma (OK)
0.25%–4.75%
Oregon (OR)
4.75%–9.9%
Pennsylvania (PA)
3.07%
Rhode Island (RI)
3.75%–5.99%
South Carolina (SC)
0%–6.4%
Utah (UT)
4.65%
Vermont (VT)
3.35%–8.75%
Virginia (VA)
2%–5.75%
West Virginia (WV)
2.36%–5.12%
Wisconsin (WI)
3.5%–7.65%
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