Updated October 5, 2026. Quick answer: No, for contributions you can deduct federally. The Department of Revenue’s PA-40 instructions say “Pennsylvania follows federal rules for these deductions”, and Schedule O has a line for Health Savings Account contributions. The 2026 federal HSA limits are $4,400 for self-only coverage and $8,750 for family coverage.
Pennsylvania HSA tax treatment at a glance
| Item | What the documents say |
|---|---|
| Contributions | Deductible if allowed on your federal return: PA Schedule O line 6, with code H in the block on PA-40 line 10 |
| Earnings | Not stated in the documents read |
| Distributions | Distributions includable in federal gross income are reported on PA Schedule A |
| Where it is reported | PA Schedule O, line 6; PA-40 line 10; PA Schedule A |
| Federal HSA limits, 2026 | $4,400 self-only; $8,750 family |
| Source | Pennsylvania Department of Revenue; IRS Revenue Procedure 2025-19 |
What the Pennsylvania documents say
The 2025 PA-40 instructions list the deductions Pennsylvania allows and include code H, “Health Savings Account contribution deduction”. Under the heading Medical Savings Account and Health Savings Account Contributions they say “Pennsylvania follows federal rules for these deductions”. If you can take the deduction on your federal return and want it for Pennsylvania, you complete PA Schedule O and attach copies of the federal pages the instructions name.
Schedule O itself has the line: “Enter the amount of Health Savings Account contributions”. The instructions also bar a Pennsylvania deduction you could not take federally: “You may not claim these deductions if you cannot claim them”.
Earnings, distributions and the rest
For money coming out, the instructions list among amounts to report on PA Schedule A any amount paid out of an Archer Medical Savings Account or Health Savings Account that is “includable in the gross income of an account beneficiary” for federal income tax purposes, including distributions used for any purpose other than qualified medical expenses. The documents read do not mention a Pennsylvania additional tax on a nonqualified distribution, and they do not say how HSA earnings are taxed.
A worked example at the 2026 family limit
An illustration, not a return: a Pennsylvania resident with family coverage who makes the 2026 federal family limit of $8,750 as an individual deductible contribution would enter that contribution on Schedule O line 6 and use code H, because the instructions say Pennsylvania follows the federal rules. That is $4,350 more than the self-only limit of $4,400 would allow.
What a mover should know
Every figure on this page is Pennsylvania’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 Pennsylvania 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 instructions do not separately describe employee pre-tax payroll or employer contributions; they describe the individual deduction. They do not say how HSA earnings are taxed or whether a Pennsylvania additional tax applies to nonqualified distributions. The instructions read are for tax year 2025.
Common mistakes
- Skipping the code H entry on PA-40 line 10 when claiming the deduction.
- Claiming the Pennsylvania deduction when the federal one is not allowed; the instructions say you may not.
- 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, Pennsylvania retirement taxes, and how Pennsylvania taxes 401(k) and IRA withdrawals.
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Answer againSources
- 2025 PA-40 Personal Income Tax Return Instructions: https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/pit/documents/2025/2025_pa-40in.pdf
- 2025 PA Schedule O: Other Deductions (PA-40 O): https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/pit/documents/2025/2025_pa-40o.pdf
- 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.