My employer included all FSA payroll deductions on the 2011 W-2 line 12W. I definately contribute to an FSA and not an HSA for health care expense (i.e. unused funds are lost, must submit receipts for reimbursement, etc.) and is definately all my contributions (vouched back to all my paystubs for 2011 and was approrpately excluded from my box 1 amount). When I inquired my employer they said it was due to the new Health Bill. I believe this is incorrect and FSA contributions should not be reported at all on the W-2.
My research has come up with nothing supporting my employer's stance. IRS guidance for box 12W form 8889 and Pub 969 (version date 1/12/12) do not mention reporting for FSAs on the W-2.
My quesitons are:
1. Is my employer correct in reporting my FSA contributions on box 12W?
2. If not, must I request a corrected W2?
3. If my employer is correct then what IRS publication/guidance that supports this?
4. Why would including amounts in box 12W increase my tax liability (in turbo tax) if these were paid by me pretax?
Many thanks for your help.