"Did either of you carry over an excess HSA contribution from the previous year?
I don't remember exact amounts, but I do believe we both carried over some level of balance in the HSA from 2019."
No, I am not talking the balance in the HSA(s), but whether or not you made excess contributions in 2019 and failed to withdraw the by July 15, 2020.
OK, based on what you have said so far, you should not have excess contributions in 2020, which means that we are missing something.
I asked about how the contributions were done, but I did not complete the thought.
You had $1,134 and $5,042 as the code W amounts in box 12 on your W-2s, right?
Did either of you make contributions by means of payroll deduction (I assume yes)?
On the screens "Let's enter [name]'s HSA contributions", did you enter the amount of payroll deductions on the second line, thinking that this was your personal contribution?
If so, that is the problem. The code W amount is the sum of whatever your employer contributed plus whatever you contributed by means of payroll deduction (yes, the terminology is confusing, but we have to go with the IRS's terms). So your payroll deduction is already part of line 1 and should not go on line 2.
If this is the problem, then go back through the interview for both HSAs and remove these amounts. Then come back to me and tell me what is on the form 8889 on line 2 (s/b zero), line 9 (s/b your code W amount), line 13 (s/b zero), and 14- end (should all be blank).
NOTE, there is an 8889 for each of you, so allow for that.
Let us know.
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