HSA contributions - compensation ?

[rfahey]

Client has an old SARSEP plan. Some employees put money into a HSA account. These contributions are deducted from all of the boxes on the W-2 ( including social security wages ). For the 3% employer contribution calculation do I add back the HSA contributions to the social security wage figure ?

[Gary Lesser]

Please indicate how the HSA contribution was made. E.g., Through contributions to a cafeteroia plan or through payroll deduction.

Generally, the plan will contain the definition of compensatio to be used. Most plan's include elective deferrals to a cafeteria plan (that are not included in gross income) as compensation.

I think that there may be some W-2 (box 3) problems. Elective contributions are generally treated as social security wages. If by payroll deduction, there is no affect on the W-2 (included in box 1 and box 3).

Hope this helps.