CA AB2576

Allows a deduction for contributions made to health savings accounts (HSAs) for taxable years beginning on or after January 1, 2014, conforming California law to federal Internal Revenue Code Section 62(a)(19).

Permits rollovers from Archer Medical Savings Accounts, health flexible spending arrangements, and health reimbursement accounts to HSAs, with modifications to federal penalty provisions.

Modifies the federal penalty rate for HSA distributions for non-qualified medical expenses from 10 percent to 2.5 percent under Section 223(f)(4)(A) of the Internal Revenue Code.

Repeals prior HSA-related sections (17131.4, 17131.5, 17215.1, and 17215.4) that applied to taxable years 2005-2013 on January 1, 2019.

Takes effect immediately as a tax levy.