To keep Code W HSA deferrals out of income, Form 8889 must be completed. Pretax eligibility is only determined on your tax return, so Turbo Tax puts the amount in income until you complete the necessary questions about your eligibility to have one. (Normally a person enters the W2 all at once, so wouldn't notice this)
Go to:
- Federal Taxes
- Deductions and Credits
- Medical
- 1099-SA, HSA
You would be prompted to visit this section, but may as well do so now. When you complete the HDHP questions and verify your total HSA contributions, the amount "added back" will come right off.
