IsabellaG
Expert Alumni

Deductions & credits

That can be confusing, but the amounts contributed to the HSA are considered contributed by the employer even if they are from payroll withholding, because those contributions are "pre-tax" and are excluded from Box 1 of your W-2. You don't pay tax on it, but you don't get an additional deduction for it either. If you contributed to your HSA outside of your paycheck (with after-tax money), then you would be able to take a deduction for that.

In other words, instead of making an actual contribution,you elected to reduce your pay in exchange for the employer's contribution to the HSA. Your W-2 pay was reduced by the amount you elected, and you don't pay tax on it because you never got it. 

You do have to go through the HSA section however to show that you qualify to have an HSA by having a HDHP (high deductible health plan).

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