Important Clarification for HSA Contribution Reporting on W-2 Forms

With tax time upon us, we wanted to send a reminder for employers who have a Health Savings Account (HSA) regarding their contribution reporting.  Whether you complete your own W-2s or use a payroll service, you will want to ensure that all employer contributions made to an employee’s HSA are recorded on the employee’s W-2 in Box 12 with Code “W”.  This is described on page 6 of the W-2 instructions on the IRS website (click here for more details).  Furthermore, this figure should also include amounts the employee contributed to the HSA through a section 125 cafeteria plan (explained on page 13 of the W-2 instructions).

Should you have additional questions regarding HSA contribution reporting, please contact our office at 919-403-1986.

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Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.

IRS CIRCULAR 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

January 11, 2007

Hill, Chesson & Woody Employee Benefit Services

194 Finley Golf Course Rd, Suite 200,
Chapel Hill, NC 27517
Phone: 919.403.1986
Fax: 919.913.0237

www.hcwbenefits.com