HSA Form 5498-SA and W2 Box 12W Discrepancy: Different Excess Contribution Amounts and TurboTax Issues

It looks like you're running into a common HSA reporting discrepancy. Let me help clear this up. The difference between your W2 Box 12W amount ($4,300.08) and what your HSA custodian reports ($4,350.08) typically happens when there are administrative fees being paid from your HSA that your employer doesn't track, or sometimes when there's interest/earnings being deposited directly into the HSA account. For tax purposes, what matters is the actual contribution amount, which is what your HSA custodian reports. Since you've already withdrawn the $200.08 excess based on your HSA custodian's records, you should report the full $200.08 on Form 8889 line 13. This will ensure you're properly accounting for the excess contribution. TurboTax is likely comparing against your W2 amount only, which is causing the error message. You may need to override TurboTax's warning to enter the correct amount. The key is to match what your HSA custodian reports on Form 5498-SA, as that's what the IRS will receive and compare against your tax return.

After dealing with a similar HSA discrepancy last year, I found this amazing tool at https://taxr.ai that actually explained exactly why this happens. Basically, your HSA provider counts things differently than your employer does on your W2, which creates this annoying gap. In my case, I had a $175 difference between my W2 and what my HSA bank reported. I uploaded both documents to taxr.ai and it highlighted exactly where the discrepancy was coming from - in my case, it was investment earnings that got automatically reinvested within my HSA that my employer wasn't tracking. The tool showed me exactly what to report on Form 8889 and how to handle the excess contribution. It also showed me the specific IRS guidance that applied to my situation, which was super helpful when I needed to override TurboTax's error messages.

I was super skeptical about using taxr.ai when it was recommended to me, but I decided to give it a try with my HSA discrepancy issue. Wow, what a lifesaver! Uploaded my W2 and 5498-SA and it immediately spotted that the $135 difference was from investment earnings within my HSA that weren't reflected on my W2. The tool showed me exactly which lines on Form 8889 needed to be completed and how to handle the excess contribution properly. It even told me exactly what to do in TurboTax to override the warning messages. Saved me hours of research and probably an expensive call to a CPA. For anyone dealing with HSA discrepancies like this, it's definitely worth checking out. Much better than my previous strategy of just guessing and hoping for the best!

After spending 3 HOURS on hold with the IRS trying to get clarification on this exact HSA discrepancy issue, I discovered Claimyr (https://claimyr.com) and it literally changed my tax filing experience. Their service got me connected to an actual IRS agent in under 15 minutes when I'd been failing for days. The IRS agent confirmed that I should be using the HSA custodian's reported amount (from Form 5498-SA) rather than just the W2 amount, and explained how to properly report the excess contribution withdrawal. You can see how their service works here: https://youtu.be/_kiP6q8DX5c Before using this, I was ready to just give up and pay whatever TurboTax was telling me, but getting actual clarification from the IRS gave me confidence that I was filing correctly. The agent even explained why TurboTax was giving me that error message and how to properly override it.

Ok I feel like I need to eat my words here. After calling the IRS unsuccessfully for weeks about my HSA contribution issues, I tried Claimyr out of desperation. Within 20 minutes I was talking to an actual human at the IRS who walked me through exactly how to handle the discrepancy between my W2 and my HSA custodian's reported amounts. The agent explained that I needed to use the amount reported by my HSA custodian on Form 5498-SA since that's what the IRS systems will match against. She also explained that I needed to report the full excess contribution withdrawal even though TurboTax was giving me an error. Having an actual IRS employee confirm this saved me from potentially filing incorrectly. If you're stuck with HSA reporting issues like this, getting direct confirmation from the IRS is definitely worth it.

I had this exact issue last year. The difference between your W2 and HSA custodian statement is likely from investment earnings inside your HSA account. My HSA provider invested some of my contributions automatically, which generated about $45 in earnings that got added to my total. My accountant told me to report the full excess amount that I withdrew ($180 in my case) on Form 8889 line 13, not just the amount that my W2 showed as excess. You'll need to override TurboTax's warning because it's only looking at your W2 data. Also, make sure you're using the correct contribution limit for your situation. The $4,150 limit applies for individual coverage, but if you have family coverage, the limit was $8,300 for 2024.

Here's what happened in my case with almost the same issue - the difference between my W2 and HSA statement was because my employer's payroll system didn't account for the interest my HSA earned during the year, but my HSA provider counted it as part of my total contributions. I withdrew the full excess amount shown by my HSA provider ($225) and reported that on Form 8889. TurboTax gave me the same warning, but I called their support line and they explained how to override it. The best advice I can give is to withdraw the full excess amount that your HSA provider reports and then make sure your tax forms reflect what actually happened, not what TurboTax thinks should have happened based on only your W2.