HSA and Form 8889

[bigd5361]

Been using Turbo Tax for many years.  This year I noticed something different regarding the software as it relates to form 8889. My employer contributes $1000 each year, and I make $500 contributions from my monthly paycheck, for a total of $7000 for the year, which is represented in Box 12b Code W. (total employer and employee contribution).  Last year the W2 reflected the same amounts as this year, however when processing my tax return on Turbo Tax, it does not provide a Form 8889 which would provide documentation that $6000 of the total $7000 was pretax dollars.  When processing the tax return, it essentially is telling the IRS that I've made no contribution, and all the funds were provided my my employer thus no tax advantage or benefit. I've seen other post regarding this issue, with various "work arounds" all of which appear to be improper and against the tax code.  All I'm asking is there a software change from last year that might be causing this error. 

[Mike9241]

for your contributions made through your employer, the employer is supposed to reduce box 1 wages. that's how you get the deduction for your contributions. the code W contributions will show up on line 9 of form 8889

you must go through the section of Turbotax that deals with HSA contributions. just entering the W-2 amount in box 12 with code W is not sufficient.

[bigd5361]

Appreciate the response, but the only adjustment I have in my Box 1 W2 is the amount of my 401K Contribution.  The $6000 HSA Contribution is not accounted as a reduction in AGI.  What I also find interesting is the difference in Form 8889 from 2020 to 2021.   In 2020 the amount on line 9 is $1000, which is the amount my employer contributed. This year, 2021 the amount on Line 9 reflects $7000 with represents the $6000 I paid, and $1000 my employer paid.  In addition, Line 2 of the Form 8889 indicates $0 in 2021, and indicated $7000 in 2020.   I still suspect an error in the TT Software which is not properly transferring the correct amounts to Form 8889 

[RaifH]

TurboTax is reporting this correctly based on what is on your W-2. The reason you do not see a reduction in your Box 1 wages for your HSA contributions like you do for your 401(k) contributions is because, unlike your 401(k) contributions, HSA contributions also reduce your taxable wages for Social Security and Medicare taxes. That means the Box 1, 3, and 5 amount have been reduced by your HSA contributions. 

Since you have already received the benefit of having your wages reduced by the contribution for these paycheck deferrals, they are reported on Form 8889 as employer contributions, even if they were something you elected to do. You only enter contributions you personally made out-of-pocket with post-tax dollars on Line 2. 

I suspect if your 2020 Line 9 was $1,000 and Line 2 was $7,000 then you may have had an over-contribution in 2020. Also, either your W-2 for 2020 had $1,000 in Box 12 Code W or it was reported incorrectly on your taxes. 

[bigd5361]

Correction, I just figured it out