How will the incentive impact my taxes? Crystal December 19, 2023 15:00 Updated The tax withholding will be subject to your tax bracket. The payment is also subject to garnishment. Related articles What if I am a state employee and elected for my incentive payments to go to my HSA? How can I track the payments? How do I update my communication preferences? If I am Medicare eligible when I retire, can I continue to cover a spouse who is not yet Medicare eligible?