Question 1

My employees want to contribute to their HSAs but want to make sure they get a tax benefit out of doing so. How does that work?

admin · Accepted Answer

Employee contributions can be made to HSAs on either after-tax or pre-tax basis. If made on an after-tax basis they should be counted as an above-the-line deduction on their tax return. If they want to make the contribution pre-tax it can be done through a Section 125 via payroll deduction (also called a “salary reduction” or “cafeteria plan”).

Question 2

My employees want to contribute to their HSAs but want to make sure they get a tax benefit out of doing so. How does that work?

admin · Accepted Answer

Employee contributions can be made to HSAs on either after-tax or pre-tax basis. If made on an after-tax basis they should be counted as an above-the-line deduction on their tax return. If they want to make the contribution pre-tax it can be done through a Section 125 via payroll deduction (also called a “salary reduction” or “cafeteria plan”).