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These plans areexcluded from tax on your federal return, but not onyour state income tax return. Once you retire and beginto receive pension benefits, you will pay federal tax onyour retirement payments, but you will not pay PA taxon those benefits.
Interest or earnings in a HSA are taxable in the year earned. I recently started an HSA. For federal income taxes this is a great deal because I get to contribute pre-tax and take tax-free distributions for medical expenses, or after age 65 I can take distributions with income tax like a 401(k).However, I'm a resident of California, and they don't adhere to the federal rules for HSAs.or federal income taxes this is a great deal because I get to contribute pre-tax and take tax-free distributions for medical expenses, or after age 65 I can take distributions with income tax like a 401(k).