I retired from Chrysler; have $0 wages. Chrysler contributed $1000 to my HSA acct in 2016 & sent us a W-2 showing it in Box 12d. How do we report this in Turbo Tax?

[Peggy-R]

A couple of years ago when we reported it as wages, Turbo Tax would not allow us to e-file.  We were told to enter it in HSA section under "Other Employer Contributions (not shown on a W2)".  I could not find a section that said that this year.  When I entered it under the section that said "Other contributions told to you by your employer", it shows it as non taxable, but that is not correct; it is taxable.

[MiriamF · Accepted solution]

The first question is whether this employer contribution is truly taxable.

Items listed in Box 12 are generally non-taxable. They include health and dental insurance paid by the employer, child care benefits, and HSA contributions.

In order for you to continue receiving contributions to your HSA from Chrysler, you must remain an eligible individual:

• You can't be enrolled in Medicare.
• You can't be a dependent on someone else's tax return.
• You must be covered by a High Deductible Health Plan.
• You cannot have any other health insurance coverage (with exceptions for dental insurance, etc.)

If you are not an eligible individual, then you are right, some of your employer's contributions to your HSA may be taxable.

If you have Medicare, you can still make contributions to an HSA, but they are reduced. A $1,000 contribution from your employer would still be tax-exempt.

If you are truly not an eligible individual under the rules described above, please reply.