My HSA pre-tax contributions are showing as employer excess contributions and are added to my income

[Paresa]

Thanks!

Here are the info:

Schedule 1 8f: empty

Schedule 2 8: empty

Schedule 2 17c: empty

Schedule 2 17d: empty

[RalphH1]

Those are the lines where additional HSA income and penalties are reported (which flow through to the tax calculation in the 1040 itself). If there’s nothing there, then we don’t have $2,000+ of additional income from HSAs. And since all your contributions already had their “pre-tax” benefit, there’s no additional deduction which has somehow been missed, so I think the HSA stuff is correct.

What’s strange is that TurboTax actually assumes the W-2 “W” amount is taxable until it’s verified in the HSA section that it’s not (with the health coverage entries). So the swing should actually go the other way (from a temporary lower refund to a higher one) as you go through the HSA section. Based on your writing, @Paresa, I’m thinking you’re very on top of things, but is it possible that you misread the refund meter before this, knowing that it wasn’t yet the final result anyway?

If it is (or maybe even if it isn’t), it might be worth it to work backwards by deleting the HSA info, to double-check. (By either removing the entries in the section itself, or going to “Tax Tools,” then “Tools,” then “Delete a Form,” and selecting any 8889s that show up.)

You can also check out the other (non-HSA) lines of those schedules, as well as the 1040 itself. And we can discuss how your tax due is being calculated (you don’t want to file if you think you’re leaving money on the table!). I may not be able to explain what you saw in the program at an earlier point in time, but ultimately if your return is correct, that’s the important thing (which I know doesn’t make you feel any better about $2,000...).

Paresa, we’ve been doing this almost like an e-mail exchange, but I may have to answer in the morning (although someone else may come by in the meantime). Thanks very much for your patience, and I hope you’re happy with TurboTax by the time you file!

[SKTFS]

The problem is Box 1, 3 and 5, even box 18 has not been reduced by the EMPLOYEE contributions that are in Box 12- W.  This is a huge issue that may be the reason people are getting no refunds and having to pay Federal and State taxes they should not be. HSA taxes should be also excluded from Soc. Sec. and Medicare taxes and almost all states it is also exempt from. 

This is a major problem I just discovered and are taking in to my HR department.

[Miss B]

I can't seem to resolve what should be a simple issue on my Form 8889. I made contributions through my W-2 of $5,171 which do show up on Line 9. I also made a $2,000 direct contribution to my HSA (family), which is on Line 2. I had a Family HSA and HDHP for the entire 12 months, but TurboTax is telling me that I have over contributed by $1,871. Any idea why this is happening? I should be able to make the full contribution of $7,171 and get the deduction for the $2,000 that wasn't on my W-2.

[ErnieS0]

Check your entries and verify that you indicated that you were only a family plan and that you had insurance for 12 months.

@Miss B