Employer left Box 12 - W blank, so I counted the HSA contributions as my contributions. Now Employer gave amended W-2 with Box 12 W and I owe extra taxes. Why??

[CEB]

In the amendment, I added Box 12 -W, and deleted the figure I had added under my own contributions (I put it there because there was nothing in Box 12 on my original W-2). Why do I now owe taxes on my contribution amount?

[CEB]

I also ended up with the standard deduction on the original filing.

[ChristinaS]

Did you give yourself a deduction for HSA contributions when you filed originally? Please look at your original 1040,line 25.

[CEB]

Yes, it is showing as a deduction. So, because it was already deducted from taxable income on the original w-2 AND it gave me the deduction when I entered contributions in the wrong spot, did I get a double benefit and now I'm just returning the double benefit?

[Bsch4477]

correct.

[CEB]

Bummer.

[ChristinaS]

Did you remove the contribution you inputted? If you only revised the W2 to enter the W, you are currently receiving an excess contribution penalty. When you remove the contribution you originally entered, the tax due may be even more.

[CEB]

Yes, and Yes. I owed taxes before I changed the original contribution I inputted. When I deleted my initial entry, the taxes went up again. Thank you for explaining why!

[ChristinaS]

No problem. Unfortunately, it seems Ws are commonly missed on original W2s and cause these headaches. Now you know if it ever happens again!

[Bsch4477 · Accepted solution]

You now owe tax because you got a tax break by originally claiming the HSA contributions were yours.  Since they were from the employer, they are already tax-free.  So you are repaying the amount of the HSA deduction you should not have gotten in your original return.