In 2015, I earned all of my income in Alabama, and I contributed $3,350 to an HSA. I filed my taxes through a free online tax filing service.
Later on, I made an effort to learn about income tax law in order to start doing my own taxes. I learned that HSA contributions are not tax deductible in my state and that I need to pay taxes on capital gains and dividends earned in my HSA. This leads me to believe that I will have to refile my 2015 Alabama income taxes.
My question arises with the values of my W-2. My "Wages, tips, etc" in Box 1 and "State Wages, tips, etc" Box 16 are equivalent. I would expect these boxes to be different to reflect the HSA contributions applied to federal but not state income, but it looks like HSA contributions are applied to both equally, even though they shouldn't be deducted from state wages.
Is this a case of incorrect W-2, or should I have known to report HSA contributions as income manually on my Alabama state income taxes? How do I report this income on my state income taxes?