BillM223
Expert Alumni

Get your taxes done using TurboTax

Minh has a good point here. When your employer first created your W-2 with its entry for code W in box 12, the code W amount should have been removed from Wages in box 1, 3, and 5. You can't tell this by just looking at your W-2, you have to ask your payroll people. 

 

This means that if they created the W-2 correctly initially, then they can't change only the code W amount without also changing the Wages in boxes 1, 3, and 5. I suspect your "corrected" W-2 is still wrong.

 

In this case (where you over contribute to your HSA), the employer does not issue a corrected W-2, because it wasn't your employer's mistake.

 

It would have been better to not ask your employer to correct the W-2. TurboTax would have announced in the HSA interview that you had excess contributions, it would have asked you if you wanted to withdraw the excess by the due date, TurboTax would have added the excess automatically to Other Income on line 8 on Schedule 1 (1040), and you would have contacted your HSA custodian to request the "withdrawal of excess contributions". And that would have been the end of it.

 

As it is, you must have a sit-down with your payroll people and ask them to either undo the change they did, or to correct the W-2 to change Wages in boxes 1, 3, and 5 to include the code W amounts. This latter request will also require that you amend your 2021 return, IF you have already filed it (I can't tell it you have).

 

NOTE: you have until the due date of the return AS EXTENDED to as for the withdrawal of the excess. That means that if you start running into a time crunch to get all this done by April18th, you can file an extension (form 4868) and the new deadline to file your return and withdraw the excess will be October 17, 2022. Of course, if you owe the IRS money, you are expected to pay it by April 18th. And, also of course, if you file and extension, you don't have to wait until October to get your business done - you can do it as soon as you can.

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