Form 8889

[bgentner01]

I filled out my prior year tax return and put my HSA deductions that were made by my employer on behalf of me with the source coming from payroll deductions. I put this on line 9 of Form 8889, Employer HSA Contributions.  I think i should have put this on line 2, HSA Contributions.  Am I correct?  How do i go about correcting this on my prior year tax return?

[BillM223]

Line 9 on the 8889 are the "employer contribution". However, contrary to what you might think, the IRS considers the employer contribution to be the amount of HSA contributions made by the employer PLUS the amount made by the employee through payroll deductions.

This is counter-intuitive, but it makes sense when you realize that both types of contributions are treated exactly the same: they appear with a code of W in box 12 of the W-2 AND they are removed from Wages in boxes 1, 3, and 5 on the W-2 before the W-2 is printed. 

This is why you don't see a deduction for your payroll deductions - they were never in your income in the first place.

The line 2 amount on the 8889 is only for HSA contributions that you made directly to the HSA, not through your employer.

So don't change anything - it's correct as is.