Money listed in 12b W but we don't have a HSA

[kimmychanning]

There is money listed in line 12b W on my W2.  We do not have a HSA.  Employer states that our insurance is a HSA plan, but we don't have a HSA.  She says this is the money we paid for our health insurance.  Turbo Tax is saying we have excess employer contributions, which is subject to additional tax.  Help, what am I supposed to do?

[JulieS]

Yes, an entry in box 12 with a W means your employer contributed to an HSA on your behalf. 

If that's not true, your employer needs to correct your W-2 form. 

If your employer contributed to an HSA on your behalf and you have a high deductible health plan (HDHP) though your job, you just need to answer the questions in the HSA section to get rid of the penalty.

Here's how to do that:

1. Open your tax return.
2. Select Deductions & Credits.
3. Scroll down to Medical, select Start to the right of 1099-SA, HSA, MSA.
4. Answer the questions according to your situation. 
5. You will be asked about the accounts you have, your 1099-SA, and your HDHP coverage. 
6. Keep going until you have answered all of the questions in the section. 
   
    

[kimmychanning]

Hello, Julie!

We do not have a HSA account.  Company is telling me that number is what we paid toward our insurance, which offers the HSA.  They will not amend our W2 without speaking to a professional... I know it is a long shot, but can you help me with this, please?

Thank you,

Kim

[BillM223]

An HSA is a type of financial account somewhat similar to an IRA, that is, it is owned by you (and not by your employer) and persists from year to year (not like an FSA).

HDHP (High Deductible Health Plan) is a health insurance policy similar to your regular employer provided health policy, except it meets certain IRS requirements, which enable you to contribute to an HSA.

"Company is telling me that number is what we paid toward our insurance" No, the amount that your company pays for the HDHP premiums should be reported with code DD in box 12 of your W-2.

As Julie noted, the code W amount is the amount that your company contributed to your HSA (if anything) plus whatever you contributed by payroll deduction (if anything).

It is clear that your employer needs to speak to a tax professional or a payroll processing professional (who should understand this), because as it stands, you need to get a corrected W-2.

[Opus 17]

The cost for employer-sponsored health insurance is supposed to be reported with code DD.  Code W is only used if either your employer, or you, or both, deposit money into an HSA.  Code W is not used to report the insurance premiums, even if you have an HSA-eligible insurance plan.

On the off chance that your employer did deposit money into an HSA that you don't know about, you need to get those details so you can start spending the money, and you need to complete the HSA interview.

If the employer is reporting your premiums, and not HSA deposits, then your employer needs to correct your W-2.  If they don't issue a corrected W-2, the IRS will send you bill for taxes and interest for the supposed HSA contribution that is not reported correctly.

[kimmychanning]

This is the message the company is giving me now:

Employee contributions under a Cafeteria 125 plan to a Health Savings Account.  Included on form w2 in box 12-code w.

- Considered 'employer' contributions under federal rule.  Contributions by an employee to an HSA under a Cafeteria plan can be made with pre-tax deductions.  The employee cannot deduct employer contributions on his or her federal income tax return as a medical expense (HSA contribution).  Employee contributions are exempt from FIT SS/MED and FUTA.  Rules for SIT, SUI, LIT vary by jurisdiction.

Code "W" is everything that you have paid towards your HSA plan as a deduction, not a contribution to an HSA since you did not have an actual HSA  account that you were contributing to.  It you look at your W2, it also includes a note to the right side where it states that we are a Cafe 125 HSA plan.

I still don't understand what that deduction was and what I am supposed to do....

Thanks for all your help so far!

[PaulaM]

The IRS instructions page 9, explain that Code W in box 12 is for HSA contributions. Contributions are funds that you (and your employer if they funded some) elected to contribute to your HSA account on a pre-tax basis. Code W is only used for HSA contributions.
 

The statement, "Code "W" is everything that you have paid towards your HSA plan as a deduction, not a contribution to an HSA since you did not have an actual HSA  account that you were contributing to" is incorrect. 

If you had a Sec. 125 plan where you paid for your insurance as a pre-tax deduction, the code for Box 12 is DD. Your employer is confusing all pre-tax items as being coded W, which is simply not the case.

As others have said previously, your employer needs to provide a corrected W-2.

IRS W-2 Form Instructions
 

[kimmychanning]

Hello, again!

Thank you all for your help!  Employer is refusing to amend the W2.  Their payroll account manager is stating:

"Box 12 Code W will print total HSA contributions made by employee as pre-tax and employer match.  The employee has contributed towards Cafe' 125 (pre-tax) HSA deduction with the deduction code H5-MED#2 FAM.  His year to date contribution is $9,207.03.  There is no employer contributions made towards HSA, the amount $9,207.03 is printed on the W2."

We also have money listed in box DD for employer paid portion for health insurance.  I have gone back and forth with them so many times, they believe the W2 is correct.  What should I do? Thanks so much!

[LeticiaF1]

If your employer will not correct your Form W2 even after you contacted them and request a correction, you can contact the IRS and start a Form W2 complaint.   You can call them at 800-829-1040 or set up an appointment to visit an IRS taxpayer assistance center (TAC). 

The IRS will send your employer a letter requesting that they issue you a corrected W2 within ten days.  they will also send you a letter with information on how to complete Form 4852, Substitute for Form W-2, Wage and Tax Statement. You can use this form in case your employer does not correct and issue you a corrected W2. 

Please reach back if you have additional questions.