Where should I report HSA contributions from insurance (not me or my employer)

Question

I make regular contributions to my HSA through my employer payroll, which is reported in my W2 at the end of the year. I also occasionally make contributions from my bank account up to the annual max, which is reported in 5498-SA.

My health insurance also makes a monthly deposit to my HSA, which is not included anywhere in my W-2 but is included in the 5498-SA. Where on my tax return do I report these amounts?

For example:

• $3,300 HSA contribution through payroll
• $2,000 contribution from my bank account
• $1,800 contribution from my insurance to the HSA

Where do I report these on the 1040? (I'm especially confused by the $1,800 contribution).

Answer 1

It goes on form 8889:

$3,300 HSA contribution through payroll

Line 9. It should show up on your W2 box 12 under code W.

$2,000 contribution from my bank account

Line 2.

$1,800 contribution from my insurance to the HSA

Line 2. It was made on your behalf. This is income to you and should also be reported on form 1040 Line 10 ("other income").

Answer 2

The 8889 instructions for 2023 have been updated to handle this exact case:

Line 9 Employer Contributions

Employer contributions (including employee payroll contributions through a cafeteria plan) include any amount an employer contributes to any HSA for you for 2023. Also, include contributions made by a health insurance plan on an employer's behalf.

So in my specific case the W2 will be "wrong" because Box 12, Code W does not include the insurance company's contribution. However, that makes sense since the contribution did not come through the employer.

So the total amount on Form 8889 Line 9 would be $5,100 in this example. I don't think it needs to be reported as income because it effectively is an employer contribution, it just isn't reported on the W2. Adding it as other income would mean I owe taxes on the amount, which is not correct.