Box 12b Code W - HSA contributions. How is it calculated?

[gabydan1988]

I just received my W2 form today from my employer and I suspect there might be a mistake on how the Box 12b Code W was calculated.

"W—Employer contributions (including amounts the employee elected to contribute using a section 125 (cafeteria) plan) to your health savings account. Report on Form 8889, Health Savings Accounts (HSAs)."

From the IRS instructions, this box should include the contributions made to my HSA account by me and by my employer, however my employer is also adding the amount deducted for the Medical Plan premium. This amount is deducted by them to pay for my Medical insurance policy and it is not deposited to my HSA account.

Is this calculation correct? 

[BillM223 · Accepted solution]

You are reading the IRS instructions correctly. Your employer should put on your W-2 in box 12 with a code of W only the amounts that the employer actually contributed to your HSA plus whatever amounts you contributed through your employer by means of payroll deduction.

Your employer should not add anything else to the code W amount. Insurance premiums paid by the employer are normally listed with a code of DD in the same place.

Your W-2 is incorrect and you need to ask for a corrected one. This error on the W-2 will possibly cause you to appear to have contributed an excess of contributions to the HSA as well as cause an incorrect form 8889.

Do not file until you get a corrected W-2. It is important to get the corrected W-2, because this will force your employer to also send the corrected W-2 to the IRS.

[gabydan1988]

Thank you so much for your reply!

Indeed this caused me to appear to have contributed an excess amount to the HSA and is negatively affecting my tax return. I will be asking for a corrected W-2.