gjgogol
"The TOTAL premium amount consists of both the Agency's portion and the employee's portion. "
Yes, this is what I said above.
"To determine how much federal tax to withhold, the agency applies the federal tax rate to the employee's pay less the employee's portion of the premium. "
I am not sure why they said it this way; the Agency's portion AND the employee's portion are both removed from Wages in box 1.
And then the employee's portion of the total premium is pulled out of the employee's pay and paid to the insurance company. The insurance company then puts a portion of the employee's premium received into an HSA. Based on this, the portion of the employee's premium placed into an HSA is NOT deductible (as it was not taxed in the first place). Does this make sense?
Yes, yes, and yes. This is the way a pass-through works.
And to answer your previous question, you don't actively deduct anything, because, as HR told you, the contributions to the HSA were never taxed in the first place.
marcia1230
The code DD amount is the sum of what the employer contributes towards the health insurance premium plus what the employee contributes by means of payroll deduction (if anything). The DD amount is removed from Wages in box 1 on the W-2 therefor, this amount is not taxed.
@gjgogol
@marcia1230
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
