HSA with a K-1 statement

[mkla]

I just want to confirm that I am doing this correctly.  I receive a K-1 statement in a partnership. 2021 was the first year I participated in a family HSA.  I contributed $5,200 through paycheck withdrawals. My employer contributed the remaining $2,000, for a total of $7,200 for the year.

Since I did not receive a W-2, there is no entry in "2021 employer and payroll contributions"

I plan on entering $5,200 in the next box "Any contributions you personally made (not through your employer"

Is that correct? I'm assuming that I do no enter the combined $7,200 there, but please correct me if I'm wrong.

The $2,000 from my employer is included in my imputed income reported on K-1. I assume I do not report this anywhere specifically in TurboTx, (eg, in the HSA section) correct?

[Mike9241 · Accepted solution]

we don't know what your situation is.     if you are an employee you should have gotten a w-2.

The IRS notice (Notice 2005-8) states that “contributions by a partnership to a bona fide partner’s HSA are not contributions by an employer to the HSA of an employee,” for tax purposes. They are instead to be treated as distributions to the partner under section 731, and are thus not deductible by the partnership and do not affect the distributive shares of the partnership’s income and deductions. Contributions in this manner are to be reported on Schedule K-1 (Form 1065), and are not included in the partner’s net earnings from self-employment under Section 1402(a)

so if your partnership handled the 1065 reporting correctly, then on your 1040 you take the deduction for the $7200 reporting them as personal (not employer) contributions.

[mkla]

Thank you. I'm a partner, and the partnership contributed $2,000.  But if I understand your answer correctly, that money essentially went to me first and then I put it in the HSA (even though it was automatic).  As such, I would claim the entire $7,200, and not just the $5,200 that was from my earnings, correct?

The K-1 simply states as a note

"HSA-Health Savings Account Contributions (Partnership + Partner), included on Form 5498   $7200"

[BillM223]

Yes, the owner of an HSA has to report (and take "credit" for) all contributions to his/her HSA, no matter who made the contributions.

So, in this case, as Mike has pointed out, you have to (or, perhaps better, get to) report the entire 7,200 as a personal (direct) HSA contribution.

However, I am concerned about "The $2,000 from my employer is included in my imputed income reported on K-1. " Were you implying that this income is not adding to your taxable income? I would have thought that the HSA contributions would be added to your guaranteed income as imputed income.

Thus, the HSA contributions are added to income on one hand, and then deducted from income on the other...which is the way it should be.

Is it this way on your return?

[mkla]

Maybe I didn't word that part clearly, but the $2,000 the partnership contributed is part of the Guaranteed Payments included on 4a of the K-1.  And yes, now that I know I can include that amount on my 1040 HSA contribution, it will essentially be added and then deducted.  

Thanks!