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rannr925
Level 2

HSA 5498-SA issued late

While working on 2020 taxes, I found that my HSA issued a 5498-SA for employee contributions made in 2019 after I had already submitted my 2019 taxes.

 

Can I include these contributions on my 2020 taxes or do I need to file a 2019 addendum?

 

Thanks.

1 Best answer

Accepted Solutions
BillM223
Employee Tax Expert

HSA 5498-SA issued late

I want to make sure that we understand what that field on the 5498-SA means. I am puzzled that you were not aware that your employer was making HSA contributions. When was this HSA created and by whom? (normally, the employer helps you set it up, but it actually belongs to you, not the employer)

 

First, you see a number in box 2 of the 5498-SA, right? This number is the total value of HSA contributions made from any source to your HSA in 2019. These might be from your employer or you or even a qualified stranger. But this box also includes any contributions made in 2019 for tax year 2018. Are you aware of any such contributions? If the only contributions in 2019 were for 2018, then you would not report them on the 2019 return. This is why it's important to know what this number actually represents.

 

Second, when an employer make contributions to an HSA on your behalf - or you make them through payroll deduction (both are reported as part of the code W) - this amount should be removed from Wages in boxes 1, 3, and 5 before the W-2 is printed. You can't tell this just from looking at your W-2 - you have to ask your employer.

 

The reason this is important is because not only do you not owe federal income tax on your HSA contributions, you don't owe Social Security or Medicare taxes either. So not doing your W-2 correctly could shortchange you a lot.

 

Furthermore, if the HSA contributions were not removed from Wages in Box 1, then the method I described above (employer contributions not reported on W-2) is the wrong method. Instead, you should navigate to the screen in the HSA interview that says, "Let's enter [name]'s HSA contribution". On this screen, you would enter the contribution amount on the second line that says personal contributions (even though they aren't). This would appear on line 12 of Schedule 1 (1040) as an HSA deduction.

 

But until you can find out how DFAS completed your W-2, you actually can't do your return correctly.

 

Furthermore, if you are in California or New Jersey (or at least owe state tax to them), not having the code W on the W-2 will cause these state returns to be wrong.

 

So, I hate to be a downer, but to do your return correctly, you need to know the following:

 

1. Did DFAS make contributions to your HSA in 2019 for 2019?

 

2. Did DFAS remove the amount of these contributions from Wages in Boxes 1, 3, and 5 before printing the W-2? Unfortunately, only DFAS can tell you this.

 

3. Why did DFAS not enter the code W amount in box 12 on the W-2, contrary to the explicit W-2 Instructions (these instructions are to the employer on how to fill out the W-2, not to you, the taxpayer). See the instructions for Code W on page 20. Is there some other issue?

 

4. Contact the HSA custodian - were the contribution transactions for the year 2019 from DFAS or from someone else?

 

I understand that this process is a pain, but see if you can find someone at DFAS who has a clue about HSAs.

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5 Replies
BillM223
Employee Tax Expert

HSA 5498-SA issued late

Are you saying that these "employee contributions" were not reported on your 2019 W-2 in box 12 with a code of W?

 

No, you would not add them to your 2020 return, but if your employer actually forgot to include them on your 2019 W-2, then you would get the 2019 TurboTax software (unless you already have it), start the amendment process, then go to the HSA interview, then on the screen, "Did your employer tell you about any other contributions?" you would say Yes and enter employer contributions not reported on your W-2.

 

But check with your employer first, to make sure that they weren't already reported on your 2019 W-2.

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rannr925
Level 2

HSA 5498-SA issued late

BillM223, Thank you for your response.

 

Yes, there is no "W" in box 12 of my 2019 W-2 or my 2020 W-2.  However, my employer did contribute to my HSA during both of those years.

 

Unfortunately, my employer is DFAS (the government) and I've been getting the run around when trying to talk to someone about this.  Everyone passes me on to the next person and no one is able to help me.

 

So, if I don't end up getting help from DFAS, then I will have to follow your instructions for amending 2019 and then enter "employer contributions not reported on W-2" for 2020 also.  Right?

BillM223
Employee Tax Expert

HSA 5498-SA issued late

I want to make sure that we understand what that field on the 5498-SA means. I am puzzled that you were not aware that your employer was making HSA contributions. When was this HSA created and by whom? (normally, the employer helps you set it up, but it actually belongs to you, not the employer)

 

First, you see a number in box 2 of the 5498-SA, right? This number is the total value of HSA contributions made from any source to your HSA in 2019. These might be from your employer or you or even a qualified stranger. But this box also includes any contributions made in 2019 for tax year 2018. Are you aware of any such contributions? If the only contributions in 2019 were for 2018, then you would not report them on the 2019 return. This is why it's important to know what this number actually represents.

 

Second, when an employer make contributions to an HSA on your behalf - or you make them through payroll deduction (both are reported as part of the code W) - this amount should be removed from Wages in boxes 1, 3, and 5 before the W-2 is printed. You can't tell this just from looking at your W-2 - you have to ask your employer.

 

The reason this is important is because not only do you not owe federal income tax on your HSA contributions, you don't owe Social Security or Medicare taxes either. So not doing your W-2 correctly could shortchange you a lot.

 

Furthermore, if the HSA contributions were not removed from Wages in Box 1, then the method I described above (employer contributions not reported on W-2) is the wrong method. Instead, you should navigate to the screen in the HSA interview that says, "Let's enter [name]'s HSA contribution". On this screen, you would enter the contribution amount on the second line that says personal contributions (even though they aren't). This would appear on line 12 of Schedule 1 (1040) as an HSA deduction.

 

But until you can find out how DFAS completed your W-2, you actually can't do your return correctly.

 

Furthermore, if you are in California or New Jersey (or at least owe state tax to them), not having the code W on the W-2 will cause these state returns to be wrong.

 

So, I hate to be a downer, but to do your return correctly, you need to know the following:

 

1. Did DFAS make contributions to your HSA in 2019 for 2019?

 

2. Did DFAS remove the amount of these contributions from Wages in Boxes 1, 3, and 5 before printing the W-2? Unfortunately, only DFAS can tell you this.

 

3. Why did DFAS not enter the code W amount in box 12 on the W-2, contrary to the explicit W-2 Instructions (these instructions are to the employer on how to fill out the W-2, not to you, the taxpayer). See the instructions for Code W on page 20. Is there some other issue?

 

4. Contact the HSA custodian - were the contribution transactions for the year 2019 from DFAS or from someone else?

 

I understand that this process is a pain, but see if you can find someone at DFAS who has a clue about HSAs.

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

rannr925
Level 2

HSA 5498-SA issued late

Thank you so much!  You have been EXTREMELY helpful.  I will reach out to DFAS.

 

(For clarification, I'm the one that set up the HSA and I did know DFAS was contributing to it.  I inputted my HSA's 1099-SA when filing my 2019 taxes but the 5498-SA had not yet been issued to me at that time so I didn't know anything about it.  I came across the 2019 5498-SA when I was on the HSA website looking for 2020's 1099-SA.  That's why I'm questioning it now.)

 

Thank you for your help!

BillM223
Employee Tax Expert

HSA 5498-SA issued late

The 5498-SA is not required to be sent to you until after the original due date. This is because nothing on the 5498-SA is required to be entered into TurboTax (you should have gotten all the necessary information in other ways), and besides, you might be changing your 2019 information up until the due date in 2020 - so why make the HSA custodian issue a 5498-SA just to have to change it for actions out of their control?

 

Good luck with the payroll department at DFAS...there has to be someone there who understands how to complete a W-2, although it is likely done by an outside payroll processor, so if you can get their contact info, you might have a better chance of talking to someone knowledgeable.

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