Box 12b of my W2 contains a "W". I was told by my employer that this represented my contribution to my insurance premium. TurboTax insists I have a HSA. How do I fix ?

[c2z4s9]

This is listed on my W2 as Cafe 125 HSA.  Even though it says "HSA" in the description I was told this was simply the insurance premium.  TurboTax insists that I had an HSA and continues to ask me about my HSA contributions, that my HSA is overfunded, and it will be taxed at a 6% rate.  How do I mark this as not an HSA?

[RalphH1]

A “W” in box 12 of your W-2 form does represent employer contributions to a Health Savings Account (as the IRS tells us here). Your employer may have put your insurance premiums on that line, but they’re telling the government something different.

Unfortunately, if you fix it on your end (changing the “W” to “DD,” which is the code for the premiums), the IRS’s copy still has the “W,” and they’ll likely contact you about that overfunding of the non-existent HSA. And since your employer seems to be confused, it’s best they double-check the number (and everything else on the W-2) anyway...

So I recommend another discussion with them (even though the last one wasn’t too productive). You could print out pages 20 and 21 of the W-2 instructions (here), and show them. Hopefully they’re interested in helping you get your return right (so you won’t be distracted by tax problems while on the job!). But you can read the official instructions about what to do if an employer won’t fix a W-2 here, if necessary.
 

@c2z4s9, be sure to touch base here in the Community if this little project lingers and you have more questions...

[c2z4s9]

Thank you very much for the answer.  I have a little bit more information on this topic.

I was further informed by my employer that the health insurance premium is considered "contributions through a cafeteria plan".  When I read the text on Form 8889 #2, I see the following:

HSA contributions you made for 2022 (or those made on your behalf), including those made by the
unextended due date of your tax return that were for 2022. Do not include employer contributions,
contributions through a cafeteria plan, or rollovers. See instructions

If what my employer says is true, then how to I use TurboTax to consider Box 12b of my W2 to be "contributions through a cafeteria plan" ?

No matter what I do, TurboTax considers this money part of an HSA and fills out form 8889 incorrectly.  My understanding is that I shouldn't be including a form 8889 at all.

[DMarkM1]

You are correct.  Employee contributions to an HSA through a cafeteria plan are not included on Line 2 of the form 8889.  That is because they are included on Line 9 (see instruction here) of the form 8889 by way of a Code W in Box 12 on your W2 as @RalphH1 shared.   

Whether on line 2 or line 9 if the total exceeds the limitation, it is excess contributions. For a self-only HSA that limitation is $3650; for a Family HSA it is $7300.  

If an amount on Line 2 does not cause the total contribution to exceed the limitation, it becomes a deduction on your tax return.  An amount on Line 9 has already been excluded from taxable wages as reported in box 1 of your W2.

As @RalphH1 explained to change the nature of the box 12 amount, a corrected W2c from your employer is needed; otherwise if you have excess contributions you need to work with your HSA servicer to get that excess removed before the filing deadline (including extensions).  You may need to put in an extension to get this accomplished.  

@ryan-hamel    

[Opus 17]

---

@c2z4s9 wrote:

No matter what I do, TurboTax considers this money part of an HSA and fills out form 8889 incorrectly.  My understanding is that I shouldn't be including a form 8889 at all.

---

Your employer is wrong, period.  Employer contributions to health insurance are reported with code DD.  Code W is used only for contributions to an HSA.

A Cafeteria plan is any of several benefits under section 125 where you agree to a reduction in salary, and your employer uses the difference (plus any employer match) to provide certain benefits.  An HSA is only one of the benefits allowable under section 125.  But health insurance premiums are under a different section of the tax law and are not reported with code W.

Start by sending the employer the instructions to the W-2 and ask in writing for a corrected W-2, and if they refuse, document their refusal in writing (saved email, text, whatever.).  Then you can file using the procedure for submitting a "substitute W-2" because your W-2 is in error.  The IRS may send a letter asking why you did not report your HSA contributions, you would reply with your proof and documentation that you don't have an HSA and did ask for a correction.

see the W-2 instructions page 20 and 21.

https://www.irs.gov/pub/irs-pdf/iw2w3.pdf