Re: The amount with code "W" in box 12 in your W-2...
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New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

When I enter in just over $4,000 in box 12 code W, my federal return and state returns go down substantially (Federal decreases $1,570 and State decreases $204).  Why do the refunds decrease?

Thanks for any help that you can provide.

23 Replies
Level 13

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

The amount with code "W" in box 12 in your W-2 is the sum of the contributions your employer made and that you made through a payroll deduction scheme.


However, the IRS, by default, assumes that these contributions are taxable until you complete the form 8889.

In TurboTax Deluxe, you enter the data to complete form 8889 by going to Federal Taxes->Deductions & Credits->Medical->HSA, MSA Contributions and entering the interview

Be sure that you complete the interview. This is because the IRS, by default, also assumes that if you don't enter the amount of your qualified medical expenses (which is one of the last questions in the interview), that the amount you had distributed is all taxable.

New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

I have the same issue, but the interview never asks me about qualified expenses.  I'm still being docked for this.

New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

I'm having the same issue. Does anyone know how to fix this? Also, is box W my contributions or my employers contributions, or mine and my employer's contributions together? My employer doesn't contribute anything to my HSA.

Employee Tax Expert

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

Box W is the amount of contributions made through your employment. The IRS does not care who contributed them, you, your employer, or both. 

As Bill stated, if you finish with the W-2 and the interview did not ask if you used any HSA funds, 

Go back to the TAX HOME page or Click on FEDERAL

Click on Deductions & Credits

Scroll down to "Medical" (First click "All tax breaks" if needed)

Click "Show more"

Scroll down to "HSA,MSA Contributions" and click Start

Answer the interview questions

 

 

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New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

I tried that multiple times but it does not seem to address the issue, not entirely sure. I also noticed that my deductions when itemized would be more than the standard deduction if the HSA contribution is considered as a deduction like it was the last year.

 

I also see that in the W-2 (my wife's), the HSA contribution has not been deducted from her taxable wages which is Box 1 on the W-2. Perhaps that is the issue?

 

Appreciate any insights anyone could provide.

Expert Alumni

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

In order to remove the additional income attributable to "Code W" which is the health savings plan indicator, you need to answer the questions regarding the HDHP (High Deductible Health Plan).

 

Please follow these steps after you sign into your account:

  • Select the Tab that labeled Personal or Federal
  • Select Deductions and Credits
  • Scroll down to the Medical Section
  • Click on 1099-SA, HSA, MSA
  • Select HSA 
  • Continue until you arrive at the screen that asks, "Were you covered by a High Deductible Health Plan (HDHP) in 2019
  • You respond yes and continue to update.

 

 

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New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

I think that was it. Thanks for your response.

New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

In response to this,  I am seeing a screen that is asking me to input the year end HSA Value found on form 5329-s.

 

Is this another form that we should be receiving from my wife's employer that will show this number?

Employee Tax Expert

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

The fair market value of an HSA is found in box 5 of form 5498-SA, which the HSA custodian mails to you.

 

The problem is that the 5498-SA is not required to be mailed to you until May, so your wife may not have gotten it yet (HSA custodians are all over the place on when they mail this form).

 

The solution, then, is to just call your HSA custodian and ask them. Actually, the form or the equivalent information may be available at your HSA custodian's website.

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New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

Thank you I will look into that! 

 

If I entered code W in Box 12 based on the w-2 information.  Why then is it asking for Form 5329-S?  

Expert Alumni

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

Code W in Box 12 of your W2 indicates that you have an employer-sponsored Health Savings Account and that there was money deposited into your HSA through the payroll system at work.

 

Code W opens up Form 8889, Health Savings Accounts, on your tax return. You may also receive a Form 1099SA if you spent any of the money in your HSA. If you are Married Filing Jointly the program will ask questions about both you and your spouse, even if the spouse is not involved with the HSA.  

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New Member

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

Thank you, So if she has not yet received her 1099-sa she should contact her employer to get it then?

Employee Tax Expert

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

@todaniel2407

 

Form 5329-S is the spouse's copy of form 5329, that is, each spouse can have their own 5329.

 

Form 5329 is used to calculate the penalty you owe for carrying over excess HSA contributions instead of withdrawing them before April 15th.

 

Form 1099-SA is used to report money that you spent out of your HSA, as Dean noted above.

 

However, if you did not spend any money out of the HSA, then you won't receive this form.

 

Note that each of you can have HSAs, so the 1099-SA is issued to a single person, not the couple.

 

Also note that the 1099-SA comes from the HSA custodian, not from your employer, who has no idea of what you are doing with your HSA. Your employer's only interaction with your HSA is to put money into it. After that, everything is in the hands of the HSA custodian.

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Level 2

What does Box 12 code "w" on my w2 mean? And why am I losing money on both my state and federal return when I enter in the amount paid?

TurboTax is importing Box 12 code W directly into line 9 of 8889. Earlier comments in this thread say that Box 12 code W indicates *any* contributions to an HSA, including both employer and employee contributions. However, when this number is entered into line 9, it indicates that the full $7,000 in that box that was added to my HSA is comprised of employer contributions, when actually it was $1,500 from my employer and $5,500 from me. As a result, my $5,500 contribution is not being subtracted from my taxable income.

 

To confuse things further, my 2017 and 2018 W-2s only list the $1,500 employer contribution. If the comments here are correct that Box 12 code W should include both employer and employee contributions, then the 2019 W-2 is correct, but being misinterpreted by TurboTax, while the 2017-2018 W-2s were incorrect but resulting in the correct answer. If I manually edit my W-2 to reduce it from $7,000 to $1,500, I get the answer I expect. Help?

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