HSA section in Turbotax online version & Form-8889

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
GKSD
Posts: 219
Joined: Sat Mar 19, 2016 9:01 am

HSA section in Turbotax online version & Form-8889

Post by GKSD » Sun Feb 11, 2018 5:56 pm

I am filling out the HSA information in Turbotax online version - it seems like there is no screen where the HSA contribution breakdown can be entered. In my case, my employer contributes to HSA and I contribute through payroll deduction. The total contribution amount is $6,750 and it shows up on W2 Box 12 Code W. But there is no where in Turbotax where the contribution breakdown for employee and employer can be entered.

There are two lines on Form 8889 where I think this information is needed-
Form 8889 Line 2 - HSA contributions you made for 2017 (do not include employer contributions)
Form 8889 Line 9 - Employer contributions made to your HSAs for 2017

For Turbotax online, I can't view how Form 8889 is getting filled up but because there was no screen to enter this breakdown, I am doubting if Turbotax is filling up Form 8889 accurately.

Any one else with similar situation?

nps
Posts: 482
Joined: Thu Dec 04, 2014 10:18 am

Re: HSA section in Turbotax online version & Form-8889

Post by nps » Sun Feb 11, 2018 6:02 pm

Code W is considered the employer contribution even if some or all of it is your own payroll allotment.

User avatar
GKSD
Posts: 219
Joined: Sat Mar 19, 2016 9:01 am

Re: HSA section in Turbotax online version & Form-8889

Post by GKSD » Sun Feb 11, 2018 6:04 pm

nps wrote:
Sun Feb 11, 2018 6:02 pm
Code W is considered the employer contribution even if some or all of it is your own payroll allotment.
Thanks, then what goes on Form 8889 line 2? Contributions made outside of payroll deductions?

nps
Posts: 482
Joined: Thu Dec 04, 2014 10:18 am

Re: HSA section in Turbotax online version & Form-8889

Post by nps » Sun Feb 11, 2018 6:09 pm

Yes, and that's what carries over to Line 25 on the 1040. The employer contributions were already exempted from taxable income.

jebmke
Posts: 7401
Joined: Thu Apr 05, 2007 2:44 pm

Re: HSA section in Turbotax online version & Form-8889

Post by jebmke » Sun Feb 11, 2018 6:11 pm

GKSD wrote:
Sun Feb 11, 2018 6:04 pm
nps wrote:
Sun Feb 11, 2018 6:02 pm
Code W is considered the employer contribution even if some or all of it is your own payroll allotment.
Thanks, then what goes on Form 8889 line 2? Contributions made outside of payroll deductions?
Yes, if you (or someone else other than the employer) paid funds to the HSA.
When you discover that you are riding a dead horse, the best strategy is to dismount.

User avatar
FiveK
Posts: 3855
Joined: Sun Mar 16, 2014 2:43 pm

Re: HSA section in Turbotax online version & Form-8889

Post by FiveK » Sun Feb 11, 2018 6:23 pm

GKSD wrote:
Sun Feb 11, 2018 6:04 pm
Thanks, then what goes on Form 8889 line 2? Contributions made outside of payroll deductions?
Yes.

As it says on Form 8889 line 2,
"HSA contributions you made for 2017 (or those made on your behalf), including those made from January 1, 2018, through April 17, 2018, that were for 2017. Do not include employer contributions, contributions through a cafeteria plan, or rollovers (see instructions)."

tunerunner
Posts: 18
Joined: Mon May 23, 2016 9:02 am

Re: HSA section in Turbotax online version & Form-8889

Post by tunerunner » Sun Feb 11, 2018 6:44 pm

I was looking at our HSA situation as well. My company makes a direct contribution (not through payroll) every January and then I fully fund my HSA the difference of their contribution via deductions out of every paycheck. My W-2 Boz 12 W only has the contributions I made through these deductions, not what they contributed. I'm thinking it's not the full amount because they didn't contribute though my pay, just directly and I'm using the numbers as is in TT. Is this the correct assumption (since I really didn't "see" their contribution through my paychecks) or should their direct contribution amount be included in box 12 W as well?

Spirit Rider
Posts: 7080
Joined: Fri Mar 02, 2007 2:39 pm

Re: HSA section in Turbotax online version & Form-8889

Post by Spirit Rider » Sun Feb 11, 2018 7:32 pm

tunerunner wrote:
Sun Feb 11, 2018 6:44 pm
I was looking at our HSA situation as well. My company makes a direct contribution (not through payroll) every January and then I fully fund my HSA the difference of their contribution via deductions out of every paycheck. My W-2 Boz 12 W only has the contributions I made through these deductions, not what they contributed. I'm thinking it's not the full amount because they didn't contribute though my pay, just directly and I'm using the numbers as is in TT. Is this the correct assumption (since I really didn't "see" their contribution through my paychecks) or should their direct contribution amount be included in box 12 W as well?
Company employer contributions are never made through payroll. Although, some companies might report them on the pay stub just like some companies will report 401k employer contributions on their pay stubs. These are for purely informational purposes.

Regardless of whether the company includes them on pay stubs or not these are employer contributions that should have been reported on your W-2 Box 12 Code W. This should not cause a problem for you unless you made an excess contribution.

W-2 Box 12 Code W is entered on Form 8889 Line 9. It is used in conjunction with Line 2 (direct contributions) to determine your total HSA contributions.

My guess is that this is an omission by the company or a miscommunication with a payroll provider. Such they did not include or provide company contributions.

User avatar
grabiner
Advisory Board
Posts: 21609
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: HSA section in Turbotax online version & Form-8889

Post by grabiner » Sun Feb 11, 2018 8:06 pm

tunerunner wrote:
Sun Feb 11, 2018 6:44 pm
I was looking at our HSA situation as well. My company makes a direct contribution (not through payroll) every January and then I fully fund my HSA the difference of their contribution via deductions out of every paycheck. My W-2 Boz 12 W only has the contributions I made through these deductions, not what they contributed. I'm thinking it's not the full amount because they didn't contribute though my pay, just directly and I'm using the numbers as is in TT. Is this the correct assumption (since I really didn't "see" their contribution through my paychecks) or should their direct contribution amount be included in box 12 W as well?
Yes, this is correct. Since the contributions were made, they have to be reported, even if they didn't make it onto your W-2.

One reason this happens with some employers is that the contribution is actually made by the plan. For example, for US Government employees with HDHPs, the plan will contribute to your HSA if you are eligible for an HSA, or to a Health Reimbursement Agreement if you are not eligible for an HSA. Your payroll office doesn't know which one the plan did, because it may not even know whether you are eligible (for example, you might be covered by your spouse's non-HDHP); therefore, it can't report the contribution.
David Grabiner

tunerunner
Posts: 18
Joined: Mon May 23, 2016 9:02 am

Re: HSA section in Turbotax online version & Form-8889

Post by tunerunner » Sun Feb 11, 2018 8:52 pm

Yes, this is correct. Since the contributions were made, they have to be reported, even if they didn't make it onto your W-2.

One reason this happens with some employers is that the contribution is actually made by the plan. For example, for US Government employees with HDHPs, the plan will contribute to your HSA if you are eligible for an HSA, or to a Health Reimbursement Agreement if you are not eligible for an HSA. Your payroll office doesn't know which one the plan did, because it may not even know whether you are eligible (for example, you might be covered by your spouse's non-HDHP); therefore, it can't report the contribution.
I will talk to our HR tomorrow to clarify. I now realize the same situation occurred last year and I didn't adjust. I'm wondering now if I should amend that return...but then again, my tax owed/refund last year will not change - so who knows if the IRS will pursue? :x

I did get a 5498-SA for 2017. I know this is just for "informational" purposes, but box 2 does show the correct amount (and the amount I was expecting to see on the W-2 12W). Is this the correct assumption? To account for this - I guess I need to add my employers contribution to the "Employer and payroll contributions not reported in Box 12 of your W-2" area of TT. Thus making the total amount the same as what is shown in box 2 of the 5498-SA.

User avatar
FiveK
Posts: 3855
Joined: Sun Mar 16, 2014 2:43 pm

Re: HSA section in Turbotax online version & Form-8889

Post by FiveK » Sun Feb 11, 2018 9:04 pm

Does TurboTax still have the input screen mentioned in HSA premium pass-through and form 8889 - TurboTax Support?

tunerunner
Posts: 18
Joined: Mon May 23, 2016 9:02 am

Re: HSA section in Turbotax online version & Form-8889

Post by tunerunner » Sun Feb 11, 2018 9:16 pm

FiveK wrote:
Sun Feb 11, 2018 9:04 pm
Does TurboTax still have the input screen mentioned in HSA premium pass-through and form 8889 - TurboTax Support?
Thanks for sharing this link. Now I am even more confused - it now seems possible that this is the case. I do have a "DD" in my box 12 with a sizable figure (which seems like what the sum of healthcare premiums would be to my employer for the year). Could it be then that the employer contribution is part of this figure as a "pass through" premium? If this is the case, then the figure they "contributed" would not need to be counted again in 12W and I wouldn't need to change anything in TT...?

User avatar
FiveK
Posts: 3855
Joined: Sun Mar 16, 2014 2:43 pm

Re: HSA section in Turbotax online version & Form-8889

Post by FiveK » Sun Feb 11, 2018 9:46 pm

tunerunner wrote:
Sun Feb 11, 2018 9:16 pm
FiveK wrote:
Sun Feb 11, 2018 9:04 pm
Does TurboTax still have the input screen mentioned in HSA premium pass-through and form 8889 - TurboTax Support?
Thanks for sharing this link. Now I am even more confused - it now seems possible that this is the case. I do have a "DD" in my box 12 with a sizable figure (which seems like what the sum of healthcare premiums would be to my employer for the year). Could it be then that the employer contribution is part of this figure as a "pass through" premium? If this is the case, then the figure they "contributed" would not need to be counted again in 12W and I wouldn't need to change anything in TT...?
Unfortunately the "DD amount is removed from Wages in box 1" comment in that link is not correct. Code DD is for information only, and specifically not for HSA contributions - see Form W 2 Reporting of Employer Sponsored Health Coverage | Internal Revenue Service.

But the use of the box with the red arrow pointing at it, if still available for this year's TT, seems worth investigating.

tunerunner
Posts: 18
Joined: Mon May 23, 2016 9:02 am

Re: HSA section in Turbotax online version & Form-8889

Post by tunerunner » Sun Feb 11, 2018 10:13 pm

Unfortunately the "DD amount is removed from Wages in box 1" comment in that link is not correct. Code DD is for information only, and specifically not for HSA contributions - see Form W 2 Reporting of Employer Sponsored Health Coverage | Internal Revenue Service.

But the use of the box with the red arrow pointing at it, if still available for this year's TT, seems worth investigating.
Thanks! The box does exist - and I filled in what the employer contributed. Is it worth filing an amendment to our 2016 return? I assume the IRS can send out a letter and it can be addressed at that point if they want - either way, they know the actual amount contributed amount and know I did not over-contribute from the 5498-SA submitted to them.

Spirit Rider
Posts: 7080
Joined: Fri Mar 02, 2007 2:39 pm

Re: HSA section in Turbotax online version & Form-8889

Post by Spirit Rider » Sun Feb 11, 2018 10:49 pm

There is nothing for you to correct. This is your employer's error. Regardless of weather your employer corrects this or not it, it should not effect your return unless as I said earlier you made an excess contribution.

The same is true for 2016. If there was no excess contribution, there is no reason to file an amended return.

The purpose of the W-2 Box 12 Code W entry is for (manual filers or tax software) and the IRS to detect excess contributions.

User avatar
GKSD
Posts: 219
Joined: Sat Mar 19, 2016 9:01 am

Re: HSA section in Turbotax online version & Form-8889

Post by GKSD » Mon Feb 12, 2018 12:28 am

Not quite related to HSA contributions, but have another question related to health care payments.

I pay spousal-surcharge through payroll deductions, to have my employer cover my spouse under the same healthcare plan. This surcharge is paid pre-tax so I think it is removed from W2 wages. But are these included in Box 12 DD? Does not seem like the surcharge payments have to be reported anywhere, correct?

Spirit Rider
Posts: 7080
Joined: Fri Mar 02, 2007 2:39 pm

Re: HSA section in Turbotax online version & Form-8889

Post by Spirit Rider » Mon Feb 12, 2018 11:37 am

This surcharge should either be a separate deduction on your pay stub or including in the health insurance deduction. You should be able to determine this from your previous open enrollment. It either case it should be reflected in your W-2 Box 12 Code DD.

However, it is irrelevant for your tax returns, because that entry is for information purposes to the employee. When/if the Obamacare Cadillac tax paid by the employer is implemented, it might be part of some IRS matching.

tunerunner
Posts: 18
Joined: Mon May 23, 2016 9:02 am

Re: HSA section in Turbotax online version & Form-8889

Post by tunerunner » Tue Feb 13, 2018 2:01 pm

Spirit Rider wrote:
Sun Feb 11, 2018 10:49 pm
There is nothing for you to correct. This is your employer's error. Regardless of weather your employer corrects this or not it, it should not effect your return unless as I said earlier you made an excess contribution.

The same is true for 2016. If there was no excess contribution, there is no reason to file an amended return.

The purpose of the W-2 Box 12 Code W entry is for (manual filers or tax software) and the IRS to detect excess contributions.
Spirit, thanks again for your help. I reached out to my employer - they confirmed there was an issue with the box 12 W reporting and are working with the payroll processor to resolve. I will still account the missing portion on the 8889 worksheet for this year to account for 2017 taxes to account for the error.

Spirit Rider
Posts: 7080
Joined: Fri Mar 02, 2007 2:39 pm

Re: HSA section in Turbotax online version & Form-8889

Post by Spirit Rider » Tue Feb 13, 2018 2:58 pm

More importantly, I can't believe I used weather instead of whether and effect instead of affect in the same sentence. I'm really slipping.

tunerunner
Posts: 18
Joined: Mon May 23, 2016 9:02 am

Re: HSA section in Turbotax online version & Form-8889

Post by tunerunner » Wed Feb 14, 2018 11:10 am

Spirit Rider wrote:
Tue Feb 13, 2018 2:58 pm
More importantly, I can't believe I used weather instead of whether and effect instead of affect in the same sentence. I'm really slipping.
Didn't catch that... lol.
:sharebeer

Post Reply