confused on Enterin HSA contribution

[amorden]

My husband has an HSA.  I entered all information correctly from box 12 of his W2 into program.   I then moved to the deductions section.   He took no money out of his account.  What I don't understand is when I get to the part about entering his contributions, (2019 employer and payroll contributions- Box 12 of your W-2), the amount is already filled in with a $0.00  I responded previously in the part for entering the 1099-SA form that the gross distribution and earnings on excess contributions were $0.00  He took no money out.  There was a misleading question about what funds from the HSA were used for. "Did you spend your HSA on Medical expenses only?   The choices were "Yes" " I only used it for medical expenses", and "No".  If you responded No, which seemed logical if no funds were withdrawn- then you were presented with the following challenge:  "I spent part of it on medical expenses" or "I didn't spend any of it on medical expenses".  My question is which response is correct for our situation?  Should I put "Yes" to first question and leave it as is?

[BillM223]

You are describing two separate issues; let's take the second one first.

"I responded previously in the part for entering the 1099-SA form that the gross distribution and earnings on excess contributions were $0.00  He took no money out. "

If your spouse did not take any money out of the HSA (nor had an excess contribution in 2018 that he withdrew before the due date of the return), then he should not have received a 1099-SA. If he did not receive a 1099-SA, you should not have indicated in the HSA interview that he did, so you would not have seen these questions about medical expenses.

So did your spouse receive a 1099-SA or not?

Note: if you spent no money from the HSA, it's OK to say that it was all for qualified medical expenses - but you probably should not have even seen this question.

The other issue (the first one you raised) is puzzling. You said:

"I entered all information correctly from box 12 of his W2 into program.   I then moved to the deductions section.   He took no money out of his account.  What I don't understand is when I get to the part about entering his contributions, (2019 employer and payroll contributions- Box 12 of your W-2), the amount is already filled in with a $0.00 "

On the screen headed by "Let's enter [name]' HSA's contributions", the first line (Employer contribution) should have had the number on the W-2 in box 12 with a code of W. Are you saying that it did not? Did your spouse's W-2 have a code W in box 12?

The second line you should leave blank unless you two made any contributions directly to the HSA (not through your employer). Don't put any part of the code W amount on that second line.

If this doesn't make sense, please come back and tell me what the code W amount is and what is on the "Let's enter [name]'s contributions screen.

[amorden]

thank you for your reply.  if I recall correctly, hubby did not receive a 1099 last year for his HSA. this document will not be available to him until tomorrow.   But i suspect the same situation- that one will not be issued because he didn’t take any disbursements or have excess food tri uti is. So to answer your question- no he doesn’t have a 1099 for me to enter. 

Boxx12 of the W-2 does not have a W. Rather, it has DD. the amount rejected there is a sum of hubby’s contributions as well as what his employer contributed

i hope this clarifies things. it seems like i should not answer yes somewhere and NOT provide further data. I just got led down a pathway that got even more confused. 

[ghost]

If you do not have 1099-SA, you should not indicate that you do. Then, you will not be asked how you spent the distribution. This mistake however should not affect your filing since you say you entered zero as a distribution.

If your spouse's employer deposited HSA contributions to the account as a pretax ( no tax withheld) contribution, then the total must be coded W in box 12 of the W2 form. Code DD is not correct for HSA employer contribution and you must get a corrected W2 from the employer. If the employer made these contributions after taxes, then you must enter the total in the HSA section to get a tax deduction.

[BillM223 · Accepted solution]

Code DD in box 12 of your husband's W-2 is the total that his employer and he through payroll deduction paid towards his health insurance premiums. This has nothing to do with his HSA (although they are probably the premiums for the HDHP).

It's quite likely that his W-2 is correct if no contributions were made to his HSA, so he probably does not need a corrected W-2.

The IRS says that if you made no contributions to or took distributions from your HSA, then you do not even need to file the form 8889. This sounds like your husband's situation.

In this case, you should not have even told TurboTax that he had an HSA. Yes, I know that's confusing. but most taxpayers with an HSA do one or the other, not no transactions during the tax year at all.

So, if indeed your husband made no contributions to the HSA nor took any distributions from the HSA and did not have a carryover of excess HSA contributions form the previous year, then let's just delete everything you have entered related to his HSA.

The best way to do this is:

NOTE: if you see a question "What type of High Deductible Health Plan did you have any December 1, 2018?" (yes, 2018), be sure to answer "NONE".

1. make a copy of your W-2(s) (if you don't have the paper copies)

2. delete your W-2(s) (use the garbage can icon next to the W-2(s) on the Income screen

*** Desktop***

3. go to View (at the top), choose Forms, and select the desired form. Note the Delete Form button at the bottom of the screen.

*** Online ***

3. go to Tax Tools (on the left), and navigate to Tools->Delete a form

4. delete form(s) 1099-SA (if one), 8889-T, and 8889-S (if one)

5. go back and re-add your W-2(s), preferably adding them manually

6. continue with your return.

Do this in future years as well, until he has money going into or out of the HSA.