Code W in box 12 of your W-2 means:
- Company contributions (including employee contributions through a cafeteria plan) to an employee's health savings account (HSA).
You and/or your employer likely made contributions to your health savings account (HSA).
You likely had a IRS form 8889 generated in your tax return. This form is used to report HSA contributions, distributions and withdrawals to the IRS.
You will want to answer the questions about your HSA transactions. It sounds like the default answers or the answers that you have entered have made the HSA transactions taxable income and lowered your Federal and state tax refund balances.
Follow these directions to correctly report HSA deductions.
- Down the left side of the screen, click Federal.
- Across the top of the screen, click Deductions & credits.
- Scroll down to Medical.
- Click on Start/Revisit.
- Click on HSA, MSA contributions.
See also this and this TurboTax Help.
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