Deductions and contributions: Setting up employee deductions for a Health Savings Account (HSA)

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After you set up a deduction or contribution for one employee, you can assign it to other employees.

1. Go here.
   (Or click the Employees tab.)
2. Click the employee's name.
3. In the Deductions & Contributions section, click Edit.
4. In the Deductions for Benefits section, click the Add a Deduction link.
5. Click the Deduction drop-down arrow and then select an existing HSA deduction or select New Deduction. If you don't see the Deduction drop-down arrow, go to the next step.
6. Select HSA plans for the category.
7. Click the Type drop-down arrow and then select the taxability of the deduction:
   • Pretax HSA: On Form W-2, employee pretax contributions (plus company contributions, if there are any) are reported in Box 12, but excluded from federal wages and most state wages. If the employee's pretax contributions are taxable at the state or local level, we include the amount in taxable wages.
   • Taxable HSA: Taxable employee contributions are not reported on Form W-2.
8. Enter the description that appears on the paycheck.
9. Select % of Gross Pay or $ Amount and then enter the deduction amount per pay period.
10. Optionally, enter the annual maximum for this deduction.
11. Click Save.

You're responsible for determining an employee's eligibility and annual maximum for HSA contributions. We don't automatically limit the annual maximum for you, because plans vary widely. The maximum total annual contribution from the employee (pretax plus taxable) and you is their HSA plan deductible or the current IRS limit, whichever is lower.

You may also like

• Health Savings Account (HSA): Overview
• Set up company contributions to a Health Savings Account (HSA)
• Deductions and contributions: Setting up employee deductions for a health insurance plan
• Deductions and contributions: Health Savings Account (HSA) limits

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