W2 box 12 W Employer contribution to HSA

[Nazman39]

Why did the taxes I owe go up when I put a value in Box 12 "W' Employer Contributions to HSA? I thought the money I contributed was pretax money.  Is this an error?

[Anonymous]

code w should have no effect on your taxes as long as you qualify to have an HSA. review form 8889 to make sure you entered info correctly.  did you enter the same amount on the 8889 form as your contributions?  that's wrong.  Code w is for employer contributions which would include their matching contributions which would be neither taxable income nor tax deductible to you.  the other part would be any amounts it took out of your paycheck and reduced line 1 - taxable wages on the W-2.  since the employer reduced your taxable wages you already got a deduction so you can't take it on the 8889.   the only contributions that you would report on 8889 as being made by you are your direct contributions to an HSA or any amount the employer took out of your wages but did not reduce them 

[Anonymous]

look at form 8889 all parts and all lines.  if you didn't enter something correctly, TT would assume that part or all was an excess contribution for which there would be a penalty.  we can not see your return so if you need help contact support

Contact Customer Service
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https://support.turbotax.intuit.com/contact

[Opus 17]

You have to keep going and read all the screens and answer all the questions, don't hop around.  HSA contributions are deemed taxable income until you answer the question "did you have a qualifying HDHP all year?" which I think comes later in the W-2 interview, and can also be accessed from the HSA section on the Deductions and Credits page. 

[Nazman39]

Thanks Hackitoff.
Form 8889 shows on line 12 that my HSA contribution was excess. Which I don't understand why it is. After I finish entering all my W2 form information. The step by step view of TurboTax shows

Great job setting yourself up for savings!

You have a HSA which means you took advantage of pre-tax dollars to help pay for health-related costs. Way to plan ahead!

Be sure to add your HSA info in Deductions & Credits to get all the tax savings you earned. But when I click on I want to know more about this it state I can't put anything in deductions & credit if I enter something on my W2 form line 12 code W.

I will continue on and put it the $8000 in the deductions section and see what happens.

If that doesn't work I will call Turbotax for help.

Cheers,

Brian

[Opus 17]

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@Nazman39 wrote:

Thanks Hackitoff.
Form 8889 shows on line 12 that my HSA contribution was excess. Which I don't understand why it is. After I finish entering all my W2 form information. The step by step view of TurboTax shows

What's on form 8889 lines 1, 2, 3 and 9?

[Anonymous]

box 12 flows automatically to the 8889 line 9 and reduces the amount you can contribute personally.  only your personal contributions are entered on line 2 (line 2 does not include what's on the W-2).  so if line 9 is $5000 and line 2 is more than $3000 you have an excess (line 2 is more than line 13).   line 12 is the max you can contribute personally (it's basically the max allowed reduce by employer contributions on line 9).  by your comments, I assume you have family HDHP  and  you or your spouse are eligible to make a catch-up contribution of $1000 and neither were covered by medicare at any time in 2019.

understand that the $8000 you're entering is flowing to line 2.  so line 2 + line 9 will be over the max. 

[Opus 17]

"$8000" is an odd statement.  I don't want to make assumptions without more detail.

However, $7000 is not only your personal maximum, it is your family maximum.  You and your spouse may have separate HSAs, if one of you is covered by a family HDHP and you have no other disqualifying coverage, but your aggregate contribution limit is $7000, plus $1000 for each spouse age 55 or older.  

[Nazman39]

It wasn't until I got to the Deduction and credit section where they asked me if I was in an HDHP. Once I said yes my taxes owed reduced $2000ish. About the $8000 contribution to HSA, my wife and I are over 55 so I put in the maximum. Thank you OPUS 17 and HackItOff for your help.
Cheers,

Nazman39

[Opus 17]

You may not contribute $1000 to one HSA even if you and your spouse are both age 55 or older. The catch-up provision is specific to the individual, and each HSAaccount is owned by only one person.  You could contribute $7000 to your account and $1000 to your spouse, or $4000 to each account, or almost any other combination. But you cannot contribute more than $7000 to any one individual account or more than $8000 total.