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Deductions & credits
FICA Tax Implications
If you contribute to your HSA through a payroll deduction, the money is excluded from both income taxes and FICA taxes. For example, if you contribute $1,000 through payroll deductions, you won't have FICA taxes withheld on that $1,000 and your W-2 will show $1,000 less income.
In contrast, if you make a contribution on your own, your W-2 will show that $1,000 of income but you get to claim the contribution as an income tax deduction. However, it doesn't reduce the amount of FICA taxes you owe.
If you contribute to your HSA through a payroll deduction, the money is excluded from both income taxes and FICA taxes. For example, if you contribute $1,000 through payroll deductions, you won't have FICA taxes withheld on that $1,000 and your W-2 will show $1,000 less income.
In contrast, if you make a contribution on your own, your W-2 will show that $1,000 of income but you get to claim the contribution as an income tax deduction. However, it doesn't reduce the amount of FICA taxes you owe.
‎June 6, 2019
7:07 AM