https://www.ftb.ca.gov/tax-pros/law/legislation/2019-2020/AB2384-021820.pdf
Earnings on amounts in HSAs are not taxable. Distributions from an HSA for qualified medical expenses are not includible in gross income; however, distributions made from an HSA that are used for non-qualified medical expenses are includible in gross income and are subject to an additional tax of 20 percent.