HSA employee portion of contribution was recorded incorrectly on W-2
Hello Payroll Colleagues,
I have question with regard to HSA employee portion of contribution. HR/ benefits just found out and notified us that they forgot to cancel John Doe HSA employee deduction for last year and , therefore, this transaction flowed over to payroll and John Doe contribution was recorded on his 2016 W-2. The fact was HR never deposit the monies into John Doe HSA account in 2016. Do you know the best solution to correct this? Should we amend all quarters in 2016 and issue W-2c or Can we refund the monies in 2017 thru negative deduction on the same HSA deduction code or can we refund the monies as miscellaneous earning in 2017 to tax it for the pretax deduction in 2016? Any help will be appreciated. Thank you.