Form W-2 Line 12 Code W for HSA contributions is less than amount reported on Form 5498-SA Line 2

[meinfeldt]

A friend made HSA contributions during 2018 of $5,200.  They show on his W-2 on line 12 Code W.  His Form 5498-SA on line 2 shows $6,200.  The difference of $1,000 represents 4 cash "rebates" of $250 deposited to his HSA during 2018 coded as "United Health Care Motion Reward" on his HSA annual history report.  Evidently he gets deposits made to his HSA for the amount of time he spends on a company treadmill.

Has anyone else seen this situation?  And how does one handle it tax wise?  I can't seem to find anyone yet that has any answers to this situation.

Any help would be greatly appreciated....

[NCperson]

Are you using TT?   If so, just input the W-2 as presented to you.

The 5498-SA form is to be used by the HSA trustee only, which is why it's not available in TT.   Note in the instructions link below, 'who should file' is the HSA trustee but they are required to send you a copy of the form. which creates this confusion.

https://www.irs.gov/pub/irs-pdf/i1099sa.pdf

the 'treadmill money' wasn't taxable to your friend in the first place (as it's not anywhere on the W-2) not is it taxable when it's distributed from the HSA (assuming it was used for medical purposes).  So the whole thing is a wash

[HollyP]

Like @NCperson stated above you do not enter the Form 5498 into TurboTax. Instead, just enter the W-2 and if your friend received a 1099-SA, for distributions from his HSA account, then enter that too. For more info please see: What do I do with Form 5498?

[dmacaroon]

I believe the OP's question was will the IRS take notice if the amount reported on the W2 12b - HSA contribution - doesn't match the amount on Form 5498 sent by the bank since they both are supposed to show the amount of contributions to the HSA for that year. Why wouldn't the employer's $1000 contribution go in box12b since that box is supposed to show funds put in by the employee via the cafeteria plan and the employer on the employee's behalf? Does the fact that is being labeled a "rebate" matter? I have a similar situation because my husband's employer did not put their contributions in box12 - just his. The money he got was for meeting certain health guidelines like being a non-smoker. How is this different than the employer putting in money for everyone unrelated to "being healthy" guidelines?

[NCperson]

Box 12 is what was deducted from your wages

It does not include what your employer contributed or what you contributed (which is permitted) outside your paycheck

They irs will only take notice if the sum of all contributions exceed the limit - they are not looking at Box 12 because it is not the totality of the contribution.

Make sense?

[BillM223]

"It does not include what your employer contributed or what you contributed (which is permitted) outside your paycheck"

This statement is half right. The amount in box 12 on your W-2 with a code of W is called the "employer contribution". It consists of the sum of what your employer contributed to your HSA AND what you contributed by means of payroll deduction.

As noted, any amount that you contributed directly to the HSA is not on your W-2, since you did not make this contribution through your employer. And, yes, the total of all contributions are applied against the annual HSA contribution limit.