HSA contributions and W-2

Based on reality, with the numbers changed to make arithmetic easy.

Company has a high-deductible medical plan for employees. Employee nominal base pay is $100,000.

Company contributes $1,000 to HSA for employee. Employee contributes $2,000 via payroll deduction.

Employee's W-2, Box 1, says $98,000. What should go in Box 12, with code W "Employer contributions to Health Savings Account"? What should the employee report as employee contributions (Form 8889, line

2)?

(I suspect my W-2 got it wrong.)

Seth

Reply to
Seth
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$3,000. Box 1 sounds OK to me.

What

Actually, line 2 is NOT contributions that went through the hands of the employer -- it is direct contributions made to the account. It says so right on the form.

Line 2 would most likely be zero. Line 9 would be $3,000 (looking at last year's form).

This confuses almost everyone at first -- payroll deductions through a cafeteria plan are lumped with employer contributions for reporting purposes.

-Mark Bole

Reply to
Mark Bole

Me, too.

It's less clear than it should be. (I've had cafeteria plans at other employers, where I got $X and could choose among different medical plans, dental, optical, etc.; if the total cost was over $X, I had to kick in the difference. In this case, there aren't any such options (the employer is too small).) If it (or the instructions) said something about "money your employer paid in that didn't show up in Form W-2, Box 1, isn't included in line 2" it would be better.

I agree.

What happened here is, payroll was done through ADP, and they apparently weren't told about the company's $1000 contribution when they generated the W-2.

Thanks,

Seth

Reply to
Seth

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