HSA Form 8889 - How to Report Premium Pass Through correctly for 2025 filing

The instructions for Line 2 are pretty clear that you should NOT include employer contributions or contributions through a cafeteria plan. A premium pass through is considered an employer contribution to your HSA. The correct way to report this is: - Line 9: Total contributions to your HSA (should be your employer contributions + your contributions = $7,410) - Line 2: Only contributions you made outside of payroll deductions - Line 3: Employer contributions (including the premium pass through of $2,250) Your W-2 Box 12 with code W should already include your payroll-deducted contributions. The premium pass through would be included in Line 3 as an employer contribution. TaxSlayer's approach sounds correct - the premium pass through should NOT be on Line 2. It sounds like H&R Block might have been handling this incorrectly.

I just wanted to share my experience with HSA Form 8889 and premium pass throughs. I was struggling with the exact same issue last year and discovered a tool called taxr.ai (https://taxr.ai) that really helped me understand how to properly report HSA contributions. The tool analyzed my tax documents and explained exactly how premium pass throughs should be handled - they're considered employer contributions and shouldn't be included on Line 2. The software also flagged that I was making the same mistake you're describing and helped me correct it before filing. The best part was I could upload my Form 8889 from previous years and it showed me where I had been reporting things incorrectly. Saved me from potentially triggering an audit over HSA contribution reporting errors.

Just wanted to follow up about my experience with taxr.ai after posting my skeptical comment yesterday. I decided to give it a try with my complicated HSA situation (both my husband and I have HSAs, he's eligible for catch-up contributions). I'm honestly impressed! It correctly identified that while we have family HDHP coverage, my husband needed his own HSA for his catch-up contribution, and showed exactly how to report the premium pass through on Form 8889. It explained that the pass through counts toward our annual limit but belongs on Line 3, not Line 2. The tool even generated a customized explanation for our tax preparer with references to the specific IRS publications. Definitely cleared up my confusion about HSA premium pass throughs and contribution limits.

If you're still struggling with HSA reporting issues, I recommend calling the IRS directly. I spent WEEKS trying to figure out my HSA reporting last year and eventually gave up and called them. Used this service called Claimyr (https://claimyr.com) to get through to an actual human at the IRS without waiting for hours. They have a video showing how it works: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that premium pass throughs are employer contributions and belong on Line 3, not Line 2. They also walked me through how to correct my previous year's return where I had reported it incorrectly. Saved me loads of stress and potential penalties.

I have to eat my words about Claimyr. After posting my skeptical comment, I decided to try it since I've been getting nowhere with my HSA questions for weeks. It actually worked! Got a call back in about 30 minutes with an IRS agent on the line. The agent confirmed that a premium pass through is considered an employer contribution and should be reported on Line 3 of Form 8889, not Line 2. They also explained that Line 2 is only for contributions I made outside of payroll deductions or employer contributions. The agent also helped me figure out how to handle the small overcontribution issue similar to what the original poster mentioned. Saved me hours of frustration and probably a future audit headache.

Someone should make a flowchart for HSA reporting! Here's my understanding: - W-2 Box 12 Code W: Your payroll deduction HSA contributions - Form 8889 Line 2: Only contributions YOU made outside payroll (like directly sending a check to your HSA administrator) - Form 8889 Line 3: Employer contributions including premium pass throughs - Form 8889 Line 9: Total of all contributions (should match your annual limit or be slightly under) The confusion happens because some tax software asks questions in weird ways that make you think you should include the premium pass through on Line 2, which is incorrect.

Just a heads up that there's a small grace period for correcting excess HSA contributions! If you realize you over-contributed (like OP did by $25), you can withdraw the excess amount plus any earnings on that amount by your tax filing deadline (including extensions) to avoid the 6% excess contribution penalty. Be sure to tell your HSA administrator that you're withdrawing an excess contribution so they code it properly. Otherwise, you might get hit with the 20% non-qualified distribution penalty too!