HSA Contributions
Client has W2 showing code W Employer contribution to HSA $720.$220 of this is from employees cafateria plan. HSA statement says employee contribution of $720 (500+220). Should the employee deduction on form 8889 be $500 or $720?
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02/11/12 7:34am PST
Viewed by asker 03/26/12 4:53pm PDT
Viewed by asker 03/26/12 4:53pm PDT
12 Replies
02/11/12 7:58am PST
The solution
If it was withheld from the paychecks, it should not be deducted on the 8889, only reported. The only deduction would occur if the client wrote a check out of pocket to the HSA.
PhoebeRoberts
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02/11/12 8:47am PST
Zero. Code W means it's already pretax.
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02/11/12 8:55am PST
So you are saying the whole sum $720 Employee contribution, on W2. plus $500 (shown as Employer contribution on HSA Statement).for a total of $1220, is only reported for informational purposes. No check from client, so no deduction.
02/11/12 9:04am PST
I have a client in a sort-of similar situation, and it got to the point where I wrote a note on the client's Lacerte letter, to pro-forma from year to year, so that both the client and I would stop worrying each year. My letter note says the employer's total on the W2 (even though not all of it came literally from the employer's pocket) is inputted to the W2 input, and carries automatically to the 8889, so we should not look for any other special figure.
02/11/12 11:08am PST
OK, wait. Are you saying that $720 went into the HSA (per your original post), or $1,220 went into the HSA (per your followup)?
Yes, no check from client = no deduction. But it's not clear to me from your changing numbers whether there was a check from the client.
02/11/12 1:19pm PST
I have to confirm that there was not a check from the client.I belive there wsa not and in that case (1220-720} $500 was a rollover from a cafeteria plan.
02/22/12 8:54am PST
W2 was incorrect HSA contribution was $1220. $500 from a MSA Rollover, plus $720 enployee contribution.
02/22/12 10:11am PST
The MSA Rollover you are referring to are you sure that a rollover should hve been included on the W-2. According to what I understand Rollovers do not count as a current deduction therefore the W-s should not have included it
02/23/12 6:53pm PST
Latest post
Employee is allowed a one time rollover of $500 from a section 125 cafeteria plan.plus $720 from paycheck $1220.
Mt Juliet CPA
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02/11/12 9:07am PST
Like Phoebe stated its pretax, but you still need to complete the required worksheets and forms
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02/11/12 10:05am PST
it is probably all an employer contribution---this sounds like employee option deal where they were given a choice for contributions-i have one here at a credit union--my guess the contribution via the cafeteria plan does not exist anymore-since they are taking it pretax-it gets added to the employer side in effect -gets a wee bit confusing--there's probably a plan description somewhere available from the companys HR or HSA provider outlining the details
02/11/12 10:34am PST
The Code W says it is an employer contribution , But in several cases the employers reduce Taxable wages in Box 1 the use the Code W for the HSA Amts contributed so in effect the employee gets a break
