I receive a 1099-R and a W2 from my pension plan provider. The W2 was provided to report only an HSA contribution on line 12a Code W. The pension plan is a qualified plan but the W2 specifically says Non-Qualified Plan. The following page of "Uncommon situations" page asks if you received money from a non-qualified pension plan such as a 457... Seems like I should check this box but It is not clear to me if this distribution to my HSA account counts as payment from a non-qualified plan since it goes to the HSA account and limits my HSA maximum contribution. Alternate option is to check - None of these apply.
Your pension plan must be carrying high deductible heath insurance then providing you an HSA deposit for the deductible. I would recommend entering both forms as received. The distribution amount in box 1 form 1099R must include your HSA deposits also. A 457 plan is a deferred compensation type plan. If this was a 457 plan, amount would be in box 1 of the W2. The amounts from box 12 of the W2 will flow to the HSA screens for questions to answer on your insurance. If you paid any amounts from the HSA, you should have received a 1099-SA for the distributions to pay medical expenses. You will need to include that form also in TurboTax.
After you have logged in and are in your return:
- Go to Search at the top of the screen.
- then enter Form 1099-SA in the search box.
- You will see a Jump To function that will take you to the 1099-SA input screens.
- There add the 1099-SA received.
Your are correct, HSA plan was my only choice at start of retirement. The 1099R does not include the HSA contribution, and never has. Only recently (2019) they started providing the W2 to start reporting the value of their contribution to the HSA. W2 only has that contribution in box 12a nothing on the rest of the form. So the way I interpret your comments below... plan is not 457 plan, therefore thinking I will pass on the box check on the page following the W2 entry section. You are correct I also receive the 1099SA/5498SA for the distribution and deposits to the HSA. Only place the company contribution to the HSA shows is on the W2.
Thanks for the assistance. Any final thoughts are certainly welcome.
May I assume that the W-2 had zero for Wages in boxes 1, 3, and 5? If so, you cannot e-file this return anyway.
The thing about HSA contributions is that they are not subject to federal income taxes, Social Security taxes, nor Medicare taxes. Thus, when you receive a W-2, the HSA contributions have been removed from each of the boxes 1, 3, and 5 before the W-2 is printed.
However, I suspect that you don't have any Wages in any box on your W-2.
So I suggest you do this:
1. Enter the 1099-R as normal, the distribution should be taxable
2. Go to the HSA interview and navigate to the screen with the title, "Let's enter [name]'s HSA contributions".
3. Enter the code W amount from the W-2 into the second line as a "personal" contribution.
You see, personal contributions are subject to Social Security tax and Medicare tax, but since since you don't have any Social Security Wages or Medicare Wages to reduce, the personal contribution reduces only the federal income, which is what you want.
This will result in the HSA contribution being removed from income in order to make Adjusted Gross Income, thus reducing your tax.
This leaves only one problem: you won't be filing your W-2 as part of the return. The IRS may notice this someday, so you should write down what you did and why (i.e., you can't e-file a W-2 with zero Wages so you had to do a workaround).
In the past, others have suggested putting $1 in the Box 1 amount on the W-2, but I feel that that is not an elegant solution, because it has you reporting a different amount than what was on the W-2. It also changes your taxable income (increases it by $1). I would prefer to have your numbers exactly right and be prepared to explain why you did what you did in the unlikely case anyone notices.
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