HSA Contributions

[Forensicacctnt]

Client, over age 55, single status contributed $650 to HSA through his pay as shown on his W-2. The employer contributed $500. The 5498-SA shows the total of $1.150. I trying to resolve how to enter the additional $500 by the employer for form 8889. Thanks very much for any help in these last days...

[David1980]

Client, over age 55, single status contributed $650 to HSA through his pay as shown on his W-2.

Assuming the client contributed to the HSA through their employer it's likely already dealt with. W-2 box 12 code W is $1,150? If so, that $1,150 is not included in box 1 and you'd be deducting the HSA contributions a second time if you take any deduction. 8889 line 2 should be $0, 8889 line 9 $1,150.

[Forensicacctnt]

Assuming the client contributed to the HSA through their employer it's likely already dealt with. W-2 box 12 code W is $1,150? If so, that $1,150 is not included in box 1 and you'd be deducting the HSA contributions a second time if you take any deduction. 8889 line 2 should be $0, 8889 line 9 $1,150.

David,

The W-2 shows $650 for box 12 code W. The client says he contributed $650; the employer contributed additional $500, so on the 5498-SA the amount in box 2 is $1,150. So, how do I enter the additional $500?
Thanks, Carl

[TaxGuyBill]

The W-2 should show $1150 with code "W". Ideally, get the W-2 corrected.

As David said, Line 9 of Form 8889 needs to show $1150. As for how to do it in your software, unless you receive a corrected W-2, you may need to override or call your software company to figure out how to change Line 9.

[Gene V]

Client, over age 55, single status contributed $650 to HSA through his pay as shown on his W-2. The employer contributed $500. The 5498-SA shows the total of $1.150. I trying to resolve how to enter the additional $500 by the employer for form 8889. Thanks very much for any help in these last days...

To start with, code W is only what the employer contribute, the employee contribute is not showed on the W-2, lets say the W-2 is correct and the employer contribute
$650 and your client contribute $500, then Form 8889 Line 2 would show $500 and Line 9 would show $650, line 19 $500 and Form 1040 line 25 $500.

If you think your client is correct, like the other said, then you should get the W-2 corrected.

JMO

[Lion]

Does the employer contribution include monies paid via payroll deduction that are then remitted by the employer? And, employee contributions are monies the employee paid outside of payroll via his own personal after-tax checks to the plan sponsor? I've always found the line descriptions ambiguous and have to go to the instructions/definitions every time.

[David1980]

To start with, code W is only what the employer contribute, the employee contribute is not showed on the W-2, lets say the W-2 is correct and the employer contribute
$650 and your client contribute $500, then Form 8889 Line 2 would show $500 and Line 9 would show $650, line 19 $500 and Form 1040 line 25 $500.

If you think your client is correct, like the other said, then you should get the W-2 corrected.

JMO

Well it really depends. Employee contributions made through a cafeteria plan are included in box 12 code W. As they are exempt from federal income tax as well as social security and Medicare it definitely is best to do it that way. You'd be correct about contributions not made through a cafeteria plan, which could be what happened here.

[Gene V]

Well it really depends. Employee contributions made through a cafeteria plan are included in box 12 code W. As they are exempt from federal income tax as well as social security and Medicare it definitely is best to do it that way. .

You are right---I stand corrected