I’m not looking for official advice regarding my taxes, and I intend to consult my company’s payroll department.
I finally got around to doing my taxes this past weekend (via TurboTax)
I have a Health Savings Account to which my employer contributes $100/month, and I contribute $30/paycheck (bi-weekly)
On my W-2, the HSA contribution of $1980 has a code that indicates the entire amount as “employer contribution”.
Out of curiosity, I changed the information in TurboTax to an “employer contribution” of $1200, and a “self-contribution” of $780…and my refund increased by approximately $50.
Is this an error on my W-2?
All Box W contributions are reported as “employer contributions” regardless of whether they are a benefit from the employer or withheld from regular wages/salary. The important factor is that they are pre-tax contributions.
Self-contributions (for W-2/1040 purposes) are those you make outside your paycheck, so they are made with already taxed income. That’s why your refund goes up: the IRS thinks you’ve already paid taxes on them so they reduce your overall amount of tax owed.
According to Publication 969:
Therefore, no, this is not an error in your W-2, assuming your taxable income was also reduced by the correct amount. Be sure to check this, because if your taxable income was already reduced by $780, you can’t take that $780 out a second time.