BillM223
Expert Alumni

Deductions & credits

Your husband's employer has made a recurring mistake, one that an employer should have known better than to do.

 

On your husband's W-2, does this contribution appear in box 12 with a code of W? If not, then you can pretend that it is not an HSA. However, I assume from your post that the $1,000 is associated with code W, which is fouling things up.

 

Since this is causing trouble for you and your husband (by "trouble", I mean "money" and "aggravation"), I would encourage you to write a letter (yes, in writing) to his employer pointing out that individuals who do not have legitimate HDHP coverage are not eligible to receive contributions into an HSA, whether from themselves, their employers, or anyone else. In this letter, please point out IRS Publication 969 which explains HSAs in some detail. Note that it is written for the employer for the most part, not for the employee.

 

If that doesn't work, I would next encourage you to contact a local tax professional (an enrolled agent, a CPA, or a tax attorney) who knows about HSAs (many don't, however), to get them to talk to your husband's employer to educate them on HSAs. Note that there are a number of HSA-themed websites which may prove to be a good place to start.

 

You should not let this drag on.

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