How should pre-tax contributions to an HSA show up on a W2?

Question

How should pre-tax contributions to an HSA account show up on a W2 from an employer? I thought they would show up like 401k or similar but that doesn't appear to be the case.

If I made $50K and put $2K of that into an HSA pre-tax and my company adds $1K, should I expect this:

Salary: $50K HSA: $2K

or

Salary: $48K HSA: $2K

or

Salary: $48K no mention of hsa

or what? Does the gift of $1k Show up anywhere on my W2? Does the $2K pre-tax contributions show up on my W2? Currently, I'm seeing "Salary $48K with no mention of hsa" - Is the company doing things right or wrong?

Answer 1

My W-2 included additional info so that it was easier to understand:

It explained the numbers for Box 1 (wages tips an other compensation, Box 3 (Social security wages), Box 5 Medicare wages , Box 16 State wages:

For box 1 it was

• Gross pay
• Less 401K (D-Box 12)
• Less Medical FSA
• Less other Cafe
• Less Cafe 125 HSA (W-box 12)

It included the numbers for each cell.

Note the number in W Box 12 for the HSA was my contibution plus their contribution. But the number in the calculation of Box 1 was only my contribution.

Answer 2

Looking at the IRS guidelines for W2 forms and the HSA section, I found IRS documentation to support mhoran_psprep's answer.

1. Employer's contribution should not appear in box 1, 3, nor 5 of the W2.
2. Employee's contribution through a cafeteria plan that is believed to be excluded from income should not appear in box 1, 3, nor 5 of the W2.
3. All employer contributions should be in box 12 of the W-2 with code "W".
4. All employee contributions through a cafeteria plan should be in box 12 of the W-2 with code "W" also.

From: http://www.irs.gov/pub/irs-pdf/iw2w3.pdf

Health savings account (HSA). An employer's contribution (including an employee's contributions through a cafeteria plan) to an employee's HSA is not subject to federal income tax withholding or social security, Medicare, or railroad retirement taxes (or FUTA tax) if it is reasonable to believe at the time of the payment that the contribution will be excludable from the employee's income. However, if it is not reasonable to believe at the time of payment that the contribution will be excludable from the employee's income, employer contributions are subject to federal income tax withholding, social security and Medicare taxes (or railroad retirement taxes, if applicable), and FUTA tax and must be reported in boxes 1, 3, and 5 (use box 14 if railroad retirement taxes apply), and on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

You must report all employer contributions (including an employee's contributions through a cafeteria plan) to an HSA in box 12 of Form W-2 with code W. Employer contributions to an HSA that are not excludable from the income of the employee also must be reported in boxes 1, 3, and 5. (Use box 14 if railroad retirement taxes apply.)

An employee's contributions to an HSA (unless made through a cafeteria plan) are includible in income as wages and are subject to federal income tax withholding and social security and Medicare taxes (or railroad retirement taxes, if applicable). Employee contributions are deductible, within limits, on the employee's Form 1040. For more information about HSAs, see Notice 2004-2, Notice 2004-50, and Notice 2008-52. Notice 2004-2, 2004-2 I.R.B. 269, is available at www.irs.gov/irb/ 2004-02_IRB/ar09.html. Notice 2004-50, 2004-33 I.R.B. 196, is available at www.irs.gov/irb/2004-33_IRB/ ar08.html. Notice 2008-52, 2008-25 I.R.B. 1166, is available at www.irs.gov/irb/2008-25_IRB/ar10.html. Also see Form 8889, Health Savings Accounts (HSAs), and Pub. 969.

Answer 3

Under a cafeteria plan, the employee's contribution to an HSA is not taxable income and therefore no tax deduction can be achieved on the amounts contributed. That makes sense.

Further, the employee's contribution, I believe, may be considered an employer's contribution under those circumstances. Look at Form 5498-SA: employee contributions to an HSA equal contributions on that from MINUS those on your W-2 Box 12 "W". For most people the two amounts are the same. You can only deduct the difference.

Answer 4

My, how clear (our US tax documentation is)! Based on my experience, box 3 & 5 are earnings minus HSA contribution. Box 1 is earnings minus HSA and minus 401K. There may be other minuses that don't apply to me.

So if you made $50K, and contributed $5K to IRA, and $2K to HSA, and employer contributed $1K to your HSA, box 1 would be either $42K or $43K. Box 12 (C) would be $5K, and box 12(W) would be $2K??? Perhaps box 12 (DD) is the $2K plus $1K = $3K

My opinion, I could be wrong.