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HSA Contributions do not reduce my income

My W2 line 12c shows $6000 (W) for Employer and Payroll Contributions.  I contributed $4000 of this amount and my employer contributed $2000.  I don't see where this amount has reduced my taxable income.  My taxable income on my W2 Box 1 is reduced only by the amount of my 401k contributions.  And that is the amount I see in Turbo Tax in the Federal Tax Summary.  I do not see any deduction for my supposed tax free contribution.  

 

It certainly appears that I am still being taxed for the amount I contributed to my HSA.

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Accepted Solutions

HSA Contributions do not reduce my income

You must resolve that with your employer.  Amounts contributed by you or your employer are considered "employer" contributions under the tax code, and are reported in box 12 with code W, and should be subtracted from your gross income in boxes 1, 3 and 5.   If your employer did not reduce boxes 1, 3 and 5, you need to get your employer to issue a corrected W-2.

 

Be aware, however, that while a 401(k) is only subtracted from box 1 (because those wages are still subject to social security and medicare tax), HSA contributions are exempt from medicare and social security tax as well, so will reduce boxes 1, 3 and 5.  So you can't just compare box 1 and 3, you need to compare boxes 1, 3 and 5 against your pay stubs. 

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2 Replies

HSA Contributions do not reduce my income

You must resolve that with your employer.  Amounts contributed by you or your employer are considered "employer" contributions under the tax code, and are reported in box 12 with code W, and should be subtracted from your gross income in boxes 1, 3 and 5.   If your employer did not reduce boxes 1, 3 and 5, you need to get your employer to issue a corrected W-2.

 

Be aware, however, that while a 401(k) is only subtracted from box 1 (because those wages are still subject to social security and medicare tax), HSA contributions are exempt from medicare and social security tax as well, so will reduce boxes 1, 3 and 5.  So you can't just compare box 1 and 3, you need to compare boxes 1, 3 and 5 against your pay stubs. 

HSA Contributions do not reduce my income

So it appears that boxes 3 and 5 have already been reduced by my HSA contributions.  This is quite confusing as nowhere on the W2 does it show the total income before any deductions.

 

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