@aneckar
You have two choices:
1. Ask your employer if they will take back the contribution for 202 when they knew that you were not eligible. This is one case in which the IRS will allow the employer to withdraw funds from your HSA. Then the employer owes you a corrected W-2, showing no code W entry in box 12 on the W-2. Without that code W entry, TurboTax won't trigger the 8889.
-- or --
2. Let TurboTax tell you about the excess contribution; call the HSA custodian to withdraw the excess (they will calculate any earnings and add them to the check they send you); early next year you will receive a 1099-SA so that the earnings can be taxed next year.
Then, to bypass the Smart Check error, go into Forms mode (I assume you have the CD/download software), and check the Self box on line 1. But you will object that you didn't have any HDHP coverage in 2020 - that's true, but it won't matter.
On line 3 on the 8889, you are showing no HDHP coverage for any month, so this is correct. You are making this line one entry just to get past the error check in TurboTax. Your 8889 will be substantially correct.
Make a note to your self of what I asked you to do and stick it in your permanent tax file, in the very unlikely case that anyone ever asks.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
