Updated October 5, 2026. Quick answer: No. The Governor’s FY2026 tax expenditure budget says that “eligible contributions to, earnings in, and qualified distributions from health savings accounts” (HSAs) “are not subject to the personal income tax”, a result it ties to the state’s reliance on the Internal Revenue Code. The 2026 federal HSA limits are $4,400 for self-only coverage and $8,750 for family coverage.
Massachusetts HSA tax treatment at a glance
| Item | What the documents say |
|---|---|
| Contributions | Eligible contributions are not subject to the Massachusetts personal income tax |
| Earnings | Eligible earnings are not subject to the personal income tax |
| Distributions | Qualified distributions are not subject to the personal income tax |
| Where it is reported | Not stated: the budget item names no form or line |
| Federal HSA limits, 2026 | $4,400 self-only; $8,750 family |
| Source | Massachusetts Executive Office for Administration and Finance; Massachusetts Legislature; IRS Revenue Procedure 2025-19 |
What the Massachusetts documents say
The source is item 1.422, Health Savings Accounts, in the Tax Expenditure Budget of the Governor’s FY2026 budget recommendation, published by the Executive Office for Administration and Finance. It sits under Personal Income Tax, Deductions from Adjusted Gross Income, and says “Due to Massachusetts’ reliance on the Internal Revenue Code” the three kinds of HSA money are outside the personal income tax.
Earnings, distributions and the rest
The statute behind the income base is M.G.L. chapter 62, section 2, which the Legislature publishes. The budget item is the document that states the HSA result; the section’s text read does not mention HSAs. The budget item names no Department of Revenue form or line.
A worked example at the 2026 family limit
An illustration: a Massachusetts resident with family coverage who contributes the 2026 federal family limit of $8,750 has $0 of that contribution subject to Massachusetts personal income tax on the budget item’s description. The contribution itself still has to be eligible under the federal rules, which cap it at $8,750 for family coverage in 2026.
What a mover should know
Every figure on this page is Massachusetts’s own rule. If you moved during the year, or live in one state and work in another, check each state’s page and return, because the documents read here describe only Massachusetts and none of them settles a part-year or two-state case. The federal side is the same everywhere: see CMG’s 2026 HSA contribution limits page, and state tax on HSA contributions for the other states checked.
What the documents do not say
- The statement comes from the Governor’s budget document, a budget office report, not from a Department of Revenue form or instruction (those pages returned a bot wall and could not be archived). The documents read do not say how a nonqualified distribution is treated. The statute text read does not mention HSAs.
Common mistakes
- Treating a budget document as a filing instruction; check the current Department of Revenue Form 1 instructions before relying on a particular line.
- Assuming a contribution that fails the federal eligibility rules is still outside the Massachusetts tax.
- Assuming the answer for one state applies to another, or that the state answer changes the federal limits.
Related: 2026 HSA contribution limits, state tax on HSA contributions, Massachusetts retirement taxes, and how Massachusetts taxes 401(k) and IRA withdrawals.
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Answer againSources
- 1.422: Health Savings Accounts (Governor’s FY26 Budget Recommendation, Tax Expenditure Budget): https://budget.digital.mass.gov/govbudget/fy26/tax-expenditure-budget/personal-income-tax/deductions-from-adjusted-gross-income/1-422
- M.G.L. c. 62, Section 2: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section2
- Revenue Procedure 2025-19 (Internal Revenue Service): https://www.irs.gov/pub/irs-drop/rp-25-19.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.