My employer sent an incorrect W2 regarding HSA contributions and have not sent corrected W2s; how long do they have to correct the W2s and get them out?

[debfischer58]

My employer has not sent corrected W2s and it is middle February, how long do they have legally to send the corrected form?

[Hal_Al]

What was wrong with the original W-2?

[debfischer58]

No HSA contributions listed.

[Hal_Al]

I assume you mean no HSA contributions were listed in box 12. That would not matter, as long as the contribution amount has been excluded from the box 1 amount. Go ahead and file

[Hal_Al]

It's not clear if the HSA contributions were Employer contributions or pre tax employee contributions. They are handled differently. Only the employer contributions are required to be in box 12 with code W. Also check for an HSA entry in box 14.

[BMcCalpin]

Employee HSA contributions through a payroll deduction plan are considered part of the "employer contribution" and are included on the W-2 in box 12 with a code of W. Please see comment below for IRS reference.

[BMcCalpin]

Before you file, you must confirm that your employer actually removed the code W amount (the HSA contributions) from Wages in boxes 1, 3, and 5 - there is no easy way for you to know if they did just by looking at the W-2.

Also, if you file the W-2 as is, you may have overcontributed to your HSA, but TurboTax will be unable to detect this situation, which can lead to errors on the return.

Finally, even if the HSA contributions were removed from Wages as they should have been and if you didn't overcontribute in any case, the entries that TurboTax will put on form 8889 will be wrong. Indeed, since the W-2 won't show any contributions (on the original W-2) and if you didn't make any HSA distributions, TurboTax might suppress sending the 8889 to the IRS, which will raise red flags when the corrected W-2 is sent to the IRS with the code W amount.

[debfischer58]

Thanks.. I'm in agreement. I am afraid to file without the corrected W2.  My question is - how long does the employer have to correct it and get it to me?  It is middle of February, they know the W2 is wrong, but there is no ETA on getting corrected W2s out.  Seems like it should be illegal to hold them this long.

[BMcCalpin]

I have scanned a number of documents, and don't see an explicit deadline for W-2c forms - probably because it depends on when the error was discovered.

However, since it's after February 15, you can contact the IRS and see if they will help your employer move along. This website has instructions for what to if you never got a W-2 in the first place, but I am sure that the same people on the phone will know about W-2c. See <a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/missing-form-w2-irs-can-help">https://www.irs.gov/newsroom/missing-form...>

If you know what your Wages were supposed to be and if you know the amount that was supposed to be in box 12 with code W, then you can fill out a substitute W-2 because you don't have the original. Remember that the code W amount should have been removed from boxes 1, 3, and 5 - make sure of that when you contact your employer.

[debfischer58]

Thanks again!  This is most helpful.  I did find that the IRS can help my employer move along if I have not received a corrected W2 by the end of February!

[Hal_Al]

If you are not taking an HSA deduction (and people with payroll deduction for HSA seldom do), the line 9 entry on form 8889 is only informational. Only the employer contributions are required to be in box 12 with code W, not pre tax employee contributions.

[BMcCalpin]

See: <a rel="nofollow" target="_blank" href="https://www.irs.gov/instructions/iw2w3">https://www.irs.gov/instructions/iw2w3</a>

“You must report all employer contributions *(including an employee's contributions through a cafeteria plan)* to an HSA in box 12 of Form W-2 with code W.” The employee contribution through a payroll deduction plan are pre-tax and are part of the code W amount in box 12 of the W-2.

[Hal_Al]

@TurboTaxBillMc - I did a return for a friend, this week, the employer showed the pre tax HSA contributions in box 14 with the designation 35HSA. I verified, from his pay stub, that the contributions were pretax.  Does the designation "35" mean anything in IRS lingo?. In TT, should I force that amount to line 9 of form 8889 and is there a way to do that?

[debfischer58]

The information above regarding HSA, Box 12, Code W, is what is missing from my W-2.

[BMcCalpin]

@Hal_Al , "35HSA" doesn't mean anything in IRS lingo...unless - it would be hard to believe - it is a reference to IRS section 35, which is for the Health Coverage Tax Credit...which, as you know, has little or nothing to do with HSAs. But you might look at Title 26 § 35(e)(1) where qualified health plans for the HCTC are defined (maybe an HDHP can sneak in).

As you know, box 14 is the catch-all for "Other" items that the employer may want to communicate to the employee. Since there are few set codes, the employer is free to make up whatever he/she wants.

If the HSA contributions are definitely pre-tax for your friend, then you can get the contribution to appear on line 9 of the 8889 by going to the screen entitled "Did your employer tell you about any other contributions?" Although the heading implies that this is only for contributions for another year, answer "yes" and you will see three lines appear. The third one is the one you want: "Employer and payroll contributions not reported in Box 12 of your W-2".

Enter your box 14 HSA contribution here. This will appear on line 9 of the 8889.

If the HSA contributions turn out to be after-tax, then you have to enter them on the "Let's enter your HSA contributions" screen, where you enter it on the second line as a "personal" contribution.

I am curious - how did you tell from the pay stubs that your friend's HSA contributions were pre-tax? Since HSA contributions are removed from Wages in boxes 1, 3, and 5, it's not immediately obvious that this was done, as compared to, say, a 401(k) contribution that is removed from box 1 but not boxes 3 and 5.

I recall from last year that there were still employers listing the HSA contributions as part of a cafeteria plan, listing the HSA in box 14 but not removing the contributions from Wages.