Both Mindy's and Annette's responses are correct.
The issue is the IRS terminology. The IRS calls the code W amount the "employer contribution". This is not in reference to the source of the dollars, but to the fact that all these dollars are handled by the employer, both the amount that the employer contributes AND the amount that the taxpayer contributes through payroll deduction.
When you initially enter the W-2, the code W amount is considered taxable, because the IRS considers the code W amount to be taxable UNTIL you go through the HSA interview and show that you have the required HDHP coverage.
When you go through the HSA interview, at the end, the code W amount will be non-taxable, if you showed the proper HDHP coverage and if the contributions were not in excess.
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