Why arent w2 sec:12w (hsa contributions) deductions reflected in decreased w2 sec:1 (wages/salary)? I expect to see them treated like 401k deductions on w2. Thanks!

[MinhT1]

Box 12 code W report HSA contributions which include both employee and employer contributions. Only the employee contribution is taken out of total wages when reporting taxable wages in box 1. This is why yo do not see a direct dollar for dollar decrease in box 1 like for contributions to a 401(k) code D which only reports the employee contribution.

[taxedham]

Thanks for the quick reply, Minh! I found more info that helps clarify how HSA and 401k  contributions are taxed differently - the crux of the problem!

"Your HSA contributions are not subject to Income tax, Social Security Tax, or Medicare Tax; therefore, Boxes 1, 3, & 5 of your W2 have already been reduced by your $5,250 HSA Contributions.

On the other hand, your 401(k) contributions are not subject to Income Tax and reduce Box 1 of your W2; however, your 401(k) Contributions are subject to Social Security Tax and Medicare Tax so they are not deducted from Boxes 3 & 5 of your W2."

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/w2-box-1-wages-reflects-401k-con...

[BillM223 · Accepted solution]

That is correct - this means that you cannot tell if the HSA contributions were removed from boxes 1, 3, and 5 just by looking at the W-2 - you have to go ask the Payroll Department.

But it is a very good reason why if you have an HSA, you should contribute through your employer - you save the 7.6% on the SS and Medicare tax, too.

@taxedham