why does form 8889s assume that code w on w-2 is all employer contribution? My client contributed the full amount of HSA in code W.

Forum|Forum|6 years ago
June 1, 2020
9 replies
53 views

Code W on W-2 shows $4000. ProSeries carries that amt to form 8889S as all contributed by employer but employer did not contribute any money. Client loses $1000 deduction and has to pay tax on $1000. This doesn't make sense. Client should be able to deduct full $4000 contibution she made and not be penalized for excess contribution.

ProSeries Professional

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Best answer by sjrcpa

Was client's $4,000 contribution pretax?

sjrcpaAnswer

Level 15

Was client's $4,000 contribution pretax?

The more I know the more I don’t know.

M

msmith7305

Level 6

The presumption , and you should verify this, is that if your client was the one who put in the $4000 it was done as part of a Section 125 cafeteria plan. Therefore, that was never included in her taxable income and she would not be entitled to an additional deduction.

D

dmangelliAuthor

Level 2

The only difference between box 1 & 3 is her 403b deduction so I dont believe it was pretax. That is why I put the 4000 on form 8889S in box 2. But proseries only lets her deduct 3000 & taxes her on excess if 1000.

qbteachmt

Level 15

Employer and Employee shares are treated the same = as Pre-tax. You need to find out from that employer if they treated it as taxable (post tax). That tells you if it is already not being reported for income tax purposes, or if that is "employee post-tax" contribution that qualifies for tax deduction. And if there was too much contributed, you need to address that issue and remove the overage.

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qbteachmt

Level 15

"and not be penalized for excess contribution."

Why not?

Don't yell at us; we're volunteers

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