No, it is not a taxable contribution as long as you were eligible to
make the contributions to the Health Savings Account (HSA) by being enrolled in
a High Deductible Health Plan (HDHP).
Entering information into your return regarding HSA contributions
is a two-step process. Each step is likely to cause the
refund/balance due number to change because TurboTax constantly updates the calculations as you go through the return.
The first step occurs when you enter your W-2 that includes contributions to the HSA. After entering the information from your W-2,
the amounts contributed to the HSA are included in your income (thus causing a
higher balance due or lower refund).
Then, the second step is to verify
your eligibility to contribute to the HSA due to coverage under a High
Deductible Health Plan. This results
in the HSA contribution being removed from income since you were eligible to
make the contributions. Therefore the
balance due amount will drop or the refund amount will increase.
To go directly to the section of your return to verify your
eligibility, use these steps:
-
On the top row of the
TurboTax online screen, click on Search (or for CD/downloaded TurboTax
locate the search box in the upper right corner)
-
This opens a box where you
can type in “hsa” (be sure to enter exactly as shown here) and click the
magnifying glass (or for CD/downloaded TurboTax, click Find)
-
The search results will
give you an option to “Jump to hsa”
-
Click on the blue “Jump
to hsa” link and enter your information
