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Entered Box 12 W for HSA cont but turbo tax has not accepted the entry under 1099-SA entry

Forum|Forum|7 years ago
June 3, 2019
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after entering value in Box 12 W of W-2 form Turbo Tax does not provide tax deduction for the HSA contributions.

TurboTax Premier Windows

Best answer by BillM223

First, the 1099-SA is only a report from your HSA administrator as to how much you took out of the HSA to pay for medical expenses. There is no necessary correlation between what you contribute to an HSA (box 12 code W on the W-2) and what you take out to pay for medical expenses.

Second, HSA contributions are considered taxable until your form 8889 is completed. Your form 8889 is completed only when you complete the HSA interview (Federal->Deductions & Credits->Medical->HSA MSA Contributions).

In the W-2 interview, when you entered the code W amount, your taxable income was increased by that amount because the contributions weren't deductible yet. When in the course of the HSA interview, you indicate that you were covered by an HDHP, then the contributions will become deductible and your taxable income reduced.

However, be sure to go all the way through the HSA interview, because there are questions all the way to the end that can affect your form 8889.

B

BillM223Answer

First, the 1099-SA is only a report from your HSA administrator as to how much you took out of the HSA to pay for medical expenses. There is no necessary correlation between what you contribute to an HSA (box 12 code W on the W-2) and what you take out to pay for medical expenses.

Second, HSA contributions are considered taxable until your form 8889 is completed. Your form 8889 is completed only when you complete the HSA interview (Federal->Deductions & Credits->Medical->HSA MSA Contributions).

In the W-2 interview, when you entered the code W amount, your taxable income was increased by that amount because the contributions weren't deductible yet. When in the course of the HSA interview, you indicate that you were covered by an HDHP, then the contributions will become deductible and your taxable income reduced.

However, be sure to go all the way through the HSA interview, because there are questions all the way to the end that can affect your form 8889.

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C

Cat1000

I am having the same problem and I've answered the HSA questions-I only used it for medical expenses. It is taxing me about $1500. what is going on?

B

BillM223

First, did you answer the question in Personal Info that you could be claimed as a dependent (it doesn't matter if you actually are claimed or not). If you can be claimed as a dependent, then any HSA contributions are disallowed and are added back to Other Income (if they came through your employer).

Second, if you did not answer that you had qualifying HDHP coverage for part or all of the year, then any HSA contributions will be disallowed and added back to Other Income (if they came through your employer).

Third, note that when you enter the 1099-SA, the IRS considers the distribution taxable until you indicate that the distribution was all for qualified medical expenses. That means that when you enter the 1099-SA, your income will increase, but when you complete the next screen with its question about what the expenses were for, the the distribution will be removed from income again. It's only one screen but a lot of taxpayers see this and become concerned.

Fourth, you could have gotten an excess contribution error message. Did you?

[Edited 3/24/2020 1:15 pm CDT - typos]

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