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michelea
New Member

I put money into a HSA in 2017 and 2018. in 2017 I received a 2600 tax break but in 2018 I didn’t receive any tax break

 
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I put money into a HSA in 2017 and 2018. in 2017 I received a 2600 tax break but in 2018 I didn’t receive any tax break

You probably did receive a tax break, but I need to explain to you how this happens.

Taxpayers get tax benefits from HSA contributions in two different ways.

Contributions that appear with a code W in box 12 of the W-2 are from the employer AND from the employee through a payroll deduction program. These contributions are removed from Wages in boxes 1, 3, and 5 on the W-2 before the W-2 is printed. Therefore, there is no apparent "deduction" for these contributions, because the code W amount was never in the taxpayer's income in the first place. That is, the employer is underreporting Wages by the code W amount.

Contributions that are made directly to the HSA (not through the employer) are deducted on line 25 on Schedule 1 (Form 1040).

Therefore, whether or not you see a deduction depends on how the contributions were made. But you get a tax break either way.

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