Where Are Employee Distributions to HSA Reported on W2?

When it comes to reporting employee distributions to Health Savings Accounts (HSAs) on Form W-2, it is important to understand the specifics to ensure compliance. Employee contributions to HSAs are typically reported in Box 12 of Form W-2 with a Code W. However, employer contributions to HSAs are not included in an employee's income and are not reported on Form W-2.

Employee distributions or withdrawals from an HSA are reported on Form 1099-SA, not on Form W-2. Distributions from an HSA may be reported on Form 1099-SA if they exceed the employee's qualified medical expenses for the year. It is crucial for employees to keep track of their HSA distributions and consult with a tax professional to ensure accurate reporting.

It's essential for employees to remember that while contributions to their HSAs are reported in Box 12 of the W-2 with Code W, any withdrawals made during the year aren't included on the W-2. Rather, these distributions will be detailed on Form 1099-SA, especially if they exceed the qualified medical expenses for the fiscal year.