My W-2 shows no income in box 1 but shows a code W and a contribution in box 12a. Do I have to report this W-2?

[bwcoss]

I'm retired, thus no wages to report, but the W-2 shows the contribution to my wife's HSA.  I can't e-file with a W-2 showing no wages in box 1.  Do I have to include this W-2?

[dmertz · Accepted solution]

The HSA contribution must be reported on your wife's Form 8889.

There are two ways to get around the problem.  Some people modify the W-2 by entering $1 in box 1.  It should have no significant effect on your tax return other than to increase the amount on Form 1040 line 7 by $1.  Otherwise, you can omit the W-2, go through the HSA section of the interview, indicate that your wife has an HSA, that your wife put money into an HSA, leave as $0 the amount personally contributed, indicate that her employer told her about other contributions, then enter the code-W amount as an amount that her employer did not report in box 12 of her W-2.  This will cause the HSA contribution to appear on line 9 of her Form 8889 the same as if you had entered the W-2.

[Woof]

Is the answer to this question still held as being correct?  I can just enter $1 in box one and all will be good with the IRS?

[dmertz]

If your W-2 has nothing but a code-W amount in box 12 (no other dollar amounts anywhere on the W-2) and this was a contribution for 2020, as perhaps a better alternative you can omit the W-2 from 2020 TurboTax and in the HSA section indicate that you put money into an HSA in 2020, leave the box for you personal contributions blank (or enter only other HSA contributions that you personally made), answer Yes that your employer told you about other contributions, then enter the code-W amount as Employer and payroll contributions not reported in box 12 of your W-2 (even though they were).  this will cause the code-W amount to appear on Form 8889 line 9 the same as if you had entered the W-2.

If the W-2 is actually reporting an HSA contribution made for 2019, you would need to do this on your 2019 tax return instead of on your 2020 tax return.