Code W in W2

[Pacun]

In 2024, my employer contributed $1,200 to my HSA account and I contributed about $7,000. When I entered code W and $8,200 in my W2, the program automatically did "everything" and after stating that I was qualified for 12 months, I thought I was done. After I created my efile file, everything passed but I noticed a few blue warnings. While clicking on a couple of them, I noticed that my HSA contribution worksheet correctly listed $8,200, but "amount contributed by employee" was blank. When I entered $7,000 on that worksheet, my tax liability was reduced by more than $2K. 

My clients don't like HSA and very few trust 401k, so I doubt I made mistakes on client's return. 

Please ask your clients with Code W, how much they contributed and make that entry accordingly.

 

[kathyc2]

The Code W on W2 includes both employee pretax contributions through cafeteria plan and employer contributions.  It doesn't matter the mix between employee/er.  

As the Box 1 W2 income is already reduced by the contribution, it shouldn't be entered anywhere else.  

IF the employee makes additional AFTER TAX contributions, that is entered on Line 2 of 8889.  

The max for 2024 is 9,300 if over age 55 and family coverage for full year.  

Something seems askew with what you are saying.

 

[Lee B]

In this situation, I always ask for a copy of their last 2024 pay stub to make sure.

[Pacun]

On 3/10/2025 at 5:06 PM, kathyc2 said:

The Code W on W2 includes both employee pretax contributions through cafeteria plan and employer contributions.  It doesn't matter the mix between employee/er.  

As the Box 1 W2 income is already reduced by the contribution, it shouldn't be entered anywhere else.  

IF the employee makes additional AFTER TAX contributions, that is entered on Line 2 of 8889.  

The max for 2024 is 9,300 if over age 55 and family coverage for full year.  

Something seems askew with what you are saying.

 

My return has many entries, so I am going to create a simple one and post. 

[mcbreck]

On the 8889 are you choosing single coverage or family coverage? If you put in $8,200 and choose single coverage it is going to be a taxable event as they over contributed. Otherwise the code W amount is the only figure to worry about unless they wrote a personal check to add funds to the account.