I have a question regarding HSA contributions, specifically those that show up on line 12 of my W-2.
Do these HSA contributions lower my income for the purposes of qualifying for ACA/Obamacare?
Since these contributions appear in line 12 of the W-2, are they considered MY contributions or MY EMPLOYER'S contributions? I don't know if that is the right question, but I am seeing those two terms used interchangeably in discussions.
I just don't want to possibly go over the threshold for qualifying for ACA since I am borderline.
Thank you!
The HSA contributions (both the employer's portion and your own contribution) are excluded from your wages reported in box 1 of your form W-2 and are de facto excluded from gross income used by the Marketplace to determine the premium tax credit.
Okay, so if I also made traditional IRA contributions, that amount would also automatically subtract from what appears in Box 1?
In other words, I don't have to subtract it out myself.... what the IRS looks for as to qualifying for ACA is exactly what appears in Box 1, with both IRA and HSA contributions subtracted?
Traditional IRAs are typically not taken out of your paycheck. But if you mean something like a 401k (or some other employer retirement plan), yes, that amount has already been subtracted from Box 1 of your W-2 (and there is usually some indication in Box 12 that shows the amount that you contributed to the employer retirement plan).