TurboTax treat HSA as income

[lake138geneva]

 am using TurboTax Deluxe to prepare 2018 tax return filing.  I contributed $3600 and my employer contributed $1500 in 2018.  My W-2 shows 12W as $5100, which is correct based on IRS.  However, when I entered 12W and $5100 in TurboTax, Turbotax treated it as "Other Incomes or Loss: $5100".  This resulted in an increase of $1170 in my Federal and state tax.  Since HSA is pretax, why doesTurboTax treat HSA contribution an an income?  Can anybody help me?  Thanks.

[dmertz · Accepted solution]

Until you complete the HSA section of TurboTax to indicate your eligibility for the HSA contribution, TurboTax treats the code W amount as an excess contribution.  Complete the HSA section.

[lake138geneva]

Thank you very much for your help.

[Taxpayer456]

I'm preparing my 2019 taxes and having the same issue.  Even when I go to additional HSA steps, it appears my tax-free contributions are being taxed.

Need help soon!

[HRB]

1. Yes dmertz is absolutely right (sorry you’re still having trouble taxpayer450 something in 2019, it should work).  
2.  I’m writing to warn others this is a very poor interface point with the Turbo tax program, I spent 2 1/2 hours making a test return to see if I put something in wrong, and then contacting her account to have him explain to me what dmertz explains.  It took the 2hrs because there’s a bit more than what dmertz says.  When  it takes OFF the additional tax that get added for what you know should be a tax deduction (!), it does so a a weird rate, not yours, not anyone’s.  It took mine off at some rate in between mine and the next higher one.  This was fine with me since it initially taxed my HSA tax deduction at around that same weird “rate”, which isn’t a tax rate.  It’s some legitimate rate I’m sure - like a tax that gets applied to what should be a deduction in the first place - but they  don’t bother to explain   
Since HSA’s are so common, I think TurboTax  should change it to where when you put in your W2 HSA amount instead they should leave the tax amount alone and tell you that later it will determine if it’s a tax deduction, which for most filers,  pretty much all filers, it will be.