“and it showed that I had this excess contribution from 2018 in form 5329 but the bottom line did not change. My husband does not have an HSA anymore. Somehow now he's got an FSA and balance is 00.”
The 6% penalty for carrying over an excess HSA contribution to the next year is actually 6% of the smaller of the carryover or the balance in the HSA at the end of the tax year. If your husband had spent all the money in the HSA so the balance was zero on 12/31/2019, then the penalty would have been 6% of 0, which, of course is zero.
This explains, I believe, why you did not notice a change to 2019.
If you found where you entered things wrong in 2018 and amended it (good), the carryover excess contributions may or may not still be there. There is a carryover worksheet on which various carryovers are ported from one year to the next.
Off hand, I am not sure if amending the 2018 return will change that worksheet. What I am sure of, though, is that if you had previously created your 2019 return by importing your 2018 data and THEN you amended your 2018 return, then any changes from 2018 will not carry to 2019 unless you start 2019 all over again by reimporting the 2018 data into the 2019 return.
“I did change the excess contribution to 0 from 2018.”
I am not sure where you changed this. Did you answer “NO” to the question asking if you “overfunded” your HSA in 2018? If indeed you did not really overfund your HSA in 2018 and therefore could not have carried the excess over to 2019, then answering “NO” was the correct answer.
It is likely from what I see that you did your 2019 return correctly. If the HSA balance on 12/31/2019 was zero (as I think it was), then you did not owe a penalty for 2019. Indeed, if the HSA balance was zero on 12/31/2018, then you would not have owed a penalty for 2018, as I noted above.
“Also, am I doing something weird that I'm being asked what the contribution was for 2018?”
I think that you are referring to a series of questions that follow the question, “What type of High Deductible Health Plan (HDHP) did [name] have on December 1, 2018?”
If your husband had an HSA on December 1, 2018, then he may have taken advantage of the last-month rule in 2018. The last-month rule states that if you had HDHP coverage in the last month of the year (remember that coverage is determined by the first day of the month), then you are allowed to use the full annual HSA contribution limit, no matter how few months you had HDHP coverage that year.
The only trick is that if you do this, you must stay under HDHP coverage for the next year (2019), or your contribution limit is retroactively set back to what it would have been had you done the month by month calculation.
I am assuming that your husband had HDHP coverage (Self or Family) on 12/1/2018. So you answered that question with “Family” or “Self” whichever was appropriate. By this point, since your husband did not show HDHP coverage for 2019 (he had the FSA), TurboTax assumes that he may have used the last-month rule in 2018 and had a lapse in coverage in 2019.
The way you deal with that is to answer the questions in the screens that follow – which indeed includes questions about your contributions in 2018. If it turns out that you did not contribute any more that what you would have been allowed using the limit calculated on a month-by-month basis (instead of the full year), then TurboTax will tell you that you owe no additional penalty and that will be the end of it.
So, yes, based on what I see of your story, it makes perfect sense that you would be asked about contributions in 2018.
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