Error Code Form W-2 #1: Employer HSA Contribution (Ref. #13396)

[PeteTax]

Hello LaCerte Tax Colleagues,

I need guidance on how to remove Ref #13396. This error code state the following:

Form W-2 #1: Employer HSA Contributions from the federal form W-2, box 12, code W are to be reported as an add-back on California Schedule CA, Part II, Line 1, Column C. The program can't determine if the employer HSA contributions have been included in "(16) State wages, if different" (screen 10, code 13). If employer HSA contributions are not included in box 16, please enter the total employer HSA contributions from all the W-2s in "Wages (A)" (screen 51.011, code 15) ref#13396.

The program did properly capture the HSA adjustments and added to California Schedule CA Part II. State wages, if different is applicable in this scenario as the state wages reported are greater than the Federal due to the HSA contribution. As such, I have inputted the value. The employer HSA contributions are included in the Wages. 

Can anyone provide guidance on how I can resolve this diagnostic error?

Thank you,

Peter

[George4Tacks]

For a full year resident return, the adjustment seems to be automatic. If other situations, such as what you seem to be experiencing, you need to go to Screen 51 and enter the HSA adjustment as a positive amount for Wages [A]
Verify that this does not double the adjustment. If it does double delete the entry and IGNORE the diagnostic warning.

[PeteTax]

Hey George,

Thank you for the follow-up. The return that I am preparing is a multi-state return where the W-2 has three states and additional states from partnership interests. After seeing the flow on the California adjustment, the addition without any adjustments to Screen 51 is flowing correctly. 

The lingering feeling of a critical diagnostic error always makes me cringe. 

[PeteTax · Accepted solution]

The solution to this issue is as follows: 

If the W-2 HSA contributions summation does not add up Box 12 Code W, then you need to adjust on Screen 51.011 Wages. In my situation, the amount was off by $2. This error is often caused by rounding embedded in the W-2. 

Also, if you have a multi-state issue, sometimes LaCerte is known to override box 12 inputs to one state automatically (on multi-state returns). My software did this and caused an error. I hope this helps!