Get your taxes done using TurboTax

To start with, the 50% bonus, which sounds like an apology amount, is taxable income in the year you received it. This would be “other income“ which is at the bottom of the income page under “other uncommon income.“  The interest income is taxable income in the year you received it, and would be listed under interest income. Report it as interest that does not have a 1099-INT.


Now, you are going to have to help me clarify the situation with the base amount of $166.66.  Was this amount included in the HSA contributions recorded in box 12 of your W-2 with code W for that year?  What is this amount included on the form 5498-SA from the bank?

 

Assuming that this money was recorded as an HSA contribution by your employer, then it was not part of your W-2 box 1 taxable wages.  So it’s taxable now in some form, although I’m not exactly sure how to handle that part of the payment.  I’ll ring for a smarter person than me, while you answer those two questions.  @dmertz