I think I found the problem. My HSA situation is too complicated for TTax.
I stopped contributing after 4 months because of signing up for Med. PtA (only), so I'm still on a HDHP. But because I'm married and my wife is < 65 and we are on the same Family Plan she can have a separate HSA and we can still contribute the full $8750 (2023). The excess was the amount that I over-contributed after the 4 months and took out. I can't check off the 4 months of the HDHP vs Medicare chart, that only allows $2916. I have to do the full 12 to get the $8750. We ended with ~$2700 in my HSA (< the max $2916) and ~$5000 in my wife's.
TurboTax gets the $703 from adding the original amount contributed to my HSA from box 12-W + my wife's and then subtracting $8750. But that is incorrect, since the real excess is the amount over-contributed to my own HSA that I had backed out by my company, the $2153. I should be taxed on that since it was pre-tax money when contributed.
It's all pretty complicated, and TTax doesn't have an option for partial year Medicare for one HSA and a full year allowance because we are both on the family plan, even though I can't contribute more than 4 months to my HSA and had to back that out since my company over contributed to my HSA.
Anyway, I figured out how to fix this by going to Forms and working with the HSA/8889 worksheets to get the excess to be $2153, to match the backed out amount, then the tax is calculated correctly, but it wasn't easy.
