Payroll Calif

[S T]

Anyone prepare or set up payroll in Calif??

I have a new client with Pre-Tax Employee ( 125 Account) HSA account and also an Employer Contribution, and as I understand it- California is non-conforming to Federal.

Federal is non taxable for both the EE and ER Box 1 of W-2 form - but California Employee and Employer Contributions are taxable to Calif which will be reflected in Box 16 of the W-2 Form.

Just need some confirmation that I am interpreting this correctly.

Thanks,

Sandy

[RLymanC]

CA HSA contribution

You are correct, HSA contributions that deduct from IRS gross income is added back into California income. W-2 Box 16 will differ from the amount in Box 1 by the amount of these contributions

[S T]

Confirmation

Thanks for the confirmation
We found out that the previous accountant had not correctly prepared the prior year's W-2 forms.

Sandy

[RLymanC]

Ca Hsa

I have received W-2 with amount of HSA in box 12 as code W, with no difference between Box 1 and Box 16...OH WELL, I run the W-2 as written, let the state figure it out.

[S T]

My Understanding

Is that Box 12 should have Code W - but that amount is added back to Box 16 for California wages - Also that Box 12 Code W includes both the Employees amount pretax and the Employers Contribution for HSA - which is exempt from Federal much the same as pre-tax 125 health insurance (only if this is a pre-tax 125 plan)

But - the Grief was California to make sure that reporting was correct

Took me some time to figure it out in Quickbooks - but finally made it work, and I did "massive research" on the Calif site

RLC, I agree with you - I think a lot of Calif Employers or the payroll Admin do not understand the Ca reporting procedures when it has the component of the HSA plan pre-tax or after tax.

Thanks for your input on this issue!

Sandy