Have a client with an HSA showing code W in box 12 of W2 for 3,900 employer contribution. Employer also issued a 1099-SA for 2,999 in box 1 code 1. He used all for qualified medical expenses but 3,900 is posted on line 21 of 1040. From my research, it appears that employer contributions usually are not taxable and I've reviewed 8889 but can't seem to remove the 3,999 from line 21 of the 1040. It's a family plan, W2 is about 301k. Any suggestions will be greatly appreciated. Basic question is: are employer contributions always taxable? Thanks.
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Complete Form 1099SA
Go to where you entered the info for Form 1099SA. Below the Form 1099SA (Additional Info) you need to fill in the amount on line #3 which usually is the same as the distribution. This is the amount of medical expenses you paid with the distribution. If you don't enter the same amount the difference is taxable. Does this work? If not let me know. -
Where to Check off Family
You check on "family" on line #1 form 8889.Comment
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Resolved on 8889-T line 3
Ruth, that in itself did not work; however, line 3 of the 8889 asks for the maximum contribution under a family plan if under age 55, which my client is, and that did the trick. Don't know how I missed that, but no more employer contribution from Code W on W2 appears on line 21 of 1040. Thanks. PaulComment
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Good to hear
Glad to hear you were able to fix the problem. That is always a relief!!Comment
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