"The software (and the agent I talked to) both assume taxable employee contributions made through payroll will show up in box 12, but according to the current w-2 instructions on irs.gov, they should not."
This is 100% not true. The IRS instructions for the use of code W in box 12 on the W-2 state:
Code W—Employer contributions to a health savings account (HSA). Show any employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria) plan) to an HSA
Isn't this exactly what the software is doing?
And if you are referring to the 8889 instructions for line 2, they state:
"Line 2 Include on line 2 only those amounts you, or others on your behalf, contributed to your HSA for 2023...Do not include employer contributions (see line 9) "
But employer contributions refers in IRS-speak to the code W amount on your W-2 which is supposed to include your payroll deductions for your HSA. Therefore, simple logic tells you that the payroll deductions belong on Line 9 and NOT on Line 2 of the 8889.
The problem is that the IRS speaks English the same way that lawyers speak English - and for the same reason. The average English speaker doesn't understand the technical meanings of the terms used, so thinks that TurboTax doesn't know what it is talking about.
Yes, the usage of HSA terminology by the IRS is confusing, but that doesn't meaning that TurboTax is wrong.
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