"Turbo Tax is not recognizing the excess." - Are you saying that your spouse had coverage on December 1, 2021? This invokes the last-month rule, as I guess you know.
However, TurboTax has not way of knowing if your spouse will be able to "maintain HDHP coverage" through all of 2023 - and it would be inappropriate for TurboTax to ask, because you the taxpayer can't be sure either.
I assumed from your first post that your spouse did NOT have HDHP coverage on December 1; it was not until you made the second post, that I realized that she did utilize the last-month rule. So much of my first response is inappropriate, because I was misled.
OK, if I understand it now, your spouse in fact did not have excess contributions in 2022. Instead, your spouse will fail to maintain HDHP coverage in 2023 - this is quite different. What will happen is that TurboTax will ask you questions on your 2023 return in 2024 that will show that your spouse did not maintain HDHP coverage in 2023, and TurboTax will go through a separate process to determine how much you should have been able to contribute assuming that you did not use the last-month rule.
Then TurboTax will calculate how much income to add to your 2023 return and also assess a 10% additional penalty.
NOW we have another problem - you withdrew a lot of money as excess contributions when you should not have. (Failure to maintain HDHP coverage is NOT the same as excess contributions).
If you can, by tomorrow (April 18, 2023), contact your HSA custodian and ask then to treat your recent withdrawal of "excess" contributions as a mistaken distribution. (there may be a form on the custodian's website for this). Note that the HSA custodian is likely to refuse to do this after April 18, 2023. You will need to sign something as well as send the custodian a check for the total distribution. Note that the custodian does not have to accept this request so be nice.
Then NEXT YEAR (i.e., in early 2024 on your 2023 tax return), TurboTax will take care of this.
If you added any income or made any adjustments to your 2022 return for this situation, please undo them before you file. Your 2023 tax return will take care of this situation.
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