"to my wife's IRA" - I assume you meant "HSA".
"The difference is that line 2 of form 8889 shows 0 in 2019 and for 2020 shows the entire amount the employer contributed. " - Line 2? this is the amount you contributed personally and directly to the HSA, which did not go through the employer.
So you are saying that in 2020, line 2 on the 8889 had the same number as the code W value as on your 2020 W-2? This is highly unlikely.
"Turbotax has treated the entire contribution as excess" - are you referring to your tax return for 2020 or 2021?
On your 2020 tax return, do you have a form 5329? If so, what are the amounts on lines 42 through 49?
In 2020, what type of HDHP policy did you two have? Were you on an HDHP policy at all?
What were your total HSA contributions in 2020?
For 2021, are you under a HDHP policy? I see that your wife is not.
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