8889 - hsa employee contributions

[WITAXLADY]

I get a warning asking to check if line 1 has employee contributions in the box 12 code W - the majority of time - it is the employee making these contributions - from their payroll - and it is pre-tax then. Code W, box 12

And it comes off of their gross payroll - making box 1 wages less that amount.

So if I put in Box 2 the employee contributions included in box 1 - again that number - it gives a credit  on the 1040 - meaning the taxpayer is now getting another credit! I see that as an error-  duplicating the credit

Pre-tax, lower wages and HSA credit - like if they contributed it themselves on their own - not on a work plan

Could someone play with that and check it out?

Thank you,

Darlene

[jklcpa]

If the only employEE funds contributed are on the W-2 as a reduction in wages, you don't enter them again on the 8889. The only thing you should enter on the 8889 is the limitation amount or check a box for family or self coverage so that the program calculates the limitation for you.

I think you asked the same or similar question back in April here:

 

 

[WITAXLADY]

Thank you!!

But that is not what the question asks!!

 

[jklcpa]

On 8/7/2024 at 5:30 PM, WITAXLADY said:

So if I put in Box 2 the employee contributions included in box 1 - again that number - it gives a credit  on the 1040 - meaning the taxpayer is now getting another credit! I see that as an error-  duplicating the credit

In this scenario, DO NOT ENTER ANYTHING ON LINE 2 OF THE 8889. That would definitely be an error. The taxpayer's benefit is via the W-2 box 1 wages having been reduced.

[WITAXLADY]

19 hours ago, jklcpa said:

In this scenario, DO NOT ENTER ANYTHING ON LINE 2 OF THE 8889. That would definitely be an error. The taxpayer's benefit is via the W-2 box 1 wages having been reduced.

ya - I got that.. thank you.. But I still say it is not asking correctly!

[jklcpa]

14 minutes ago, WITAXLADY said:

it is not asking correctly!

Well, I have no idea what you think is not correct. Is it the wording of the ATX warning you are questioning, or is it the form 8889 instructions for line 2?

The form's instructions are clear on the handling of pre-tax funds contributed through an employer's cafeteria plan.

[mcb39]

Dar.......occasionally clients make qualifying contributions to their HSA over and above what is withheld from their payroll.  Those clients get a credit for out of pocket contributions as long as they do not go over the maximum allowed.  I have only had a few of these and it is usually in the year of retirement, but not always.