So how did the employer show this $2,000 on your W-2? Was the $2,000 in box 12 with a code of W? It doesn't sound like it.
So where did you enter this $2,000 if it wasn't on the W-2? Did you enter it in "personal" contributions on the "Let's enter [names]'s HSA contributions" screen? Or did you do it on the screen where you are allowed to enter contributions that the employer told you about but didn't put on your W-2?
"My new employer contributed $2,000 to my HSA as a benefit (NOT deducted from my salary)."
If your employer included the $2,000 in Wages in boxes 1, 3, and 5, then the excess should NOT be automatically added back to Other Income. The excess is added to Other Income for those taxpayers who didn't pay tax on the original excess because it had ben removed from Wages when the W-2 was printed.
So the fact that the excess is not being added back to Other Income is would I would expect (although I am still curious how you entered this $2,000 in contributions).
If you make a direct/personal contribution to your HSA, then this is not reported in box 12 with a code of W on your W-2. Instead, you enter it on line 13 of Schedule 1 (1040). This is why you see: "I was expecting TurboTax to treat the $800 withdrawal as taxable income. "
Instead, what happens is if the excess is from your direct/personal contributions, then TurboTax just reduces the amount on line 13 (from $2,000 in this case to $1,200). No need to add it back to Other Income.
And if you were covered only for October and November, then please enter only those months.
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