Pre-tax HSA reported as post-tax

[Guest kathylynntoth]

I just found out that our payroll company has treated our pre-tax employee HSA contributions as post-tax and our employees are not sure if they filed their returns as pre or post. Would they have had to have filed as post-tax since that is how their W-2 treated it?

Now, how do we fix it? Is my understanding that really all they lost out on was FICA, since they were able to deduct their contributions when they filed their taxes? What a mess. Any suggestions would be appreciated.

Kathy, the bookkeeper

[jpod]

On the Federal tax side of things, see IRS Forms W-2c and 941-X and their respective instructions. Most likely employees reported what their W-2s told them to report.

If pre-tax is allowed for State and local income tax purposes, you'll have to check the rules for that State and municipality to figure out what to do.