BillM223
Expert Alumni

Deductions & credits

When your employer creates a W-2 with a code W in box 12, then the employer removes the code W amount from Wages in boxes 1, 3, and 5. That is why you don't appear to get a deduction for this - because these contribution were never in your income in the first place.

 

If, however, you made direct contributions to the HSA custodian, then this amount is considered a "deduction" and is reported on line 13 on Schedule 1 (1040).

 

However, please do not confuse these direct contributions with contributions by means of payroll deductions. Contributions by means of payroll deduction are part of the code W amount. You must not enter these contributions anywhere else in the HSA interview.

 

Very confusing but that is how the IRS set it up.

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