I thought hsa contributions were pre-tax dollars and were not supposed to be included in income on W2's. They don't appear to be excluded from income on my W2.

[ChristinaS]

To keep Code W HSA deferrals out of income, Form 8889 must be completed. Pretax eligibility is only determined on your tax return, so Turbo Tax puts the amount in income until you complete the necessary questions about your eligibility to have one. (Normally a person enters the W2 all at once, so wouldn't notice this)

Go to:

• Federal Taxes
• Deductions and Credits
• Medical
• 1099-SA, HSA

You would be prompted to visit this section, but may as well do so now. When you complete the HDHP questions and verify your total HSA contributions, the amount "added back" will come right off.

[glgohdes]

Form 8889 Line 11 reflects the employer contribution to the HSA, but then that gets subtracted from Line 8 and the only amount that gets carried forward to Form 1040 Line 25/36 is the additional contribution that we made which is then subtracted from the income. It appears that no where in this process is the employer contribution carried forward from Form 8889/worksheets to be subtracted from income.

[ChristinaS]

The employer contribution is pretax... its built into your W2, box 1. You already have the benefit. Just make sure line 21 of your 1040 doesn't show HSA on the dotted line. That would mean the Code W is being added back to your income. Its never a component of line 25 of the 1040, as it already reduced your wages (or wasn't taxed as income)

[glgohdes]

OK - that is what I was expecting in the first place but it doesn't appear to be so. I will check back with the employer to verify. Thanks for you quick, complete and to-the-point responses!! Much appreciated!

[ChristinaS]

You're welcome. Yes, if your W2 doesn't seem to reflect a pretax benefit inBox 1 for the HSA, ask your employer. If you have detailed paystubs, they may help as well.

[ghost]

@glgohdes I will add that your pretax HSA contribution should also be EXCLUDED from your FICA wages in boxes 3 and 5 in additional to box 1 taxable federal wages.