Governor Scott Walker signed his first piece of legislation on Monday, eliminating the state tax on health savings accounts (HSAs).
“Improving Wisconsin’s economic environment is the top priority for my administration and an issue that both parties should agree on,” Walker said. “Eliminating state taxes on HSAs will make health care more affordable for employees and lower costs for employers, helping create an economic environment that encourages job creation. Senators Alberta Darling and Luther Olsen, and Representatives Bob Ziegelbauer and Dean Kaufert deserve special recognition for their leadership on this issue.”
Wisconsin’s HSA regulations now allow tax deductible contributions to and withdrawals from HSAs. The changed state law brings Wisconsin into alignment with federal law, which allows contributions and withdrawals to be tax free as long as the money is used to pay for medical care.
Wisconsin Manufacturers and Commerce said the change helps move the state in the right direction from a regulatory standpoint.
“Rising health care costs are a major concern for businesses, big and small, as they strive to stay competitive, whether doing business regionally, nationally or globally,” said R.J. Pirlot, legislative affairs director for WMC. “Many Wisconsin businesses and their employees use health savings accounts as a tool to financially engage employees in healthcare spending and to help stem the rate at which their healthcare costs are growing.”
