There are two ways to receive a tax credit for HSA Contributions:
- The employer may pre-tax employee contributions through a Section 125 (i.e., POP or FSA).
- The participant may use an above-the-line deduction when filing taxes. If the tax credit is through a Section 125, the document must state it accordingly.
A self-employed individual of an S Corporation or LLC cannot pre-tax an employee HSA contribution through a Section 125.