@dmertz wrote:
Correct. Since the amount shown with code W in box 12 of your W-2 is only $6,333.18, the $166.66 that did not get deposited into the HSA would not have been excluded from the amount in box 1 of your W-2, so the $166.66 has already been taxed properly on your 2016 tax return. The only amount that needs to be included in income on your 2019 tax return is the roughly $86 that is the sum of the interest and the compensation for lost tax savings.
There is still something very odd here unless I missed it from reading too fast.
UMB only credited you with $6333, and your W-2 says you contributed $6333, but CYC thinks you contributed $6500?
My next question is what happened on your paychecks? And box 1 of your W-2? Were you really out $166 in 2016?
Because if, during one pay period in 2016 the money was not withheld from your paycheck, and you got a larger check that week, then you already received the money so the $166 in 2019 is new taxable money. (That's the simplest way that UMB and the W-2 would match, if the withholding was just missed all around.) If the money was withheld from your paycheck, then I don't understand how box 12 from your employer matches the bank instead of CYC. I just can't wrap my head around how UMB and your employer have the right figure in box 12 if your employer withheld the money from all your checks. The employer should have been tracking your paychecks and I would expect they would make their W-2s up using their own figures rather than the bank's figures.
You don't have access to your final pay stub from 2016 do you? If your employer withheld the money from your check as planned, I would expect that your final pay stub of the year would show cumulative $6500 in contributions and be different from the W-2.
