Hsa employer contributions - is being taxed, but shouldn't?

[BMcCalpin · Accepted solution]

Typically this is because you have not completed the HSA interview (Federal Taxes->Deductions & Credits->Medical, click on "HSA MSA Contributions").

You need to go all the way through the HSA interview until you are returned to the Your Tax Breaks screen.

This is because HSA contributions and distributions are considered taxable by the IRS until you provide a completed form 8889 to document your HSA transactions.

But TurboTax (which creates the 8889 for you) cannot complete the 8889 until you have answered the final question in the HSA interview.