"TT goes on to ask if husband had Medicare in 2021 and then says his maximum contribution limit is $1367. "
Did you get this when you pressed the Calculate My Maximum Contribution button? (this is one the screen with the list of months where you list Family or Self-only or Medicare or None). If so please ignore that Calculate button - it does not handle the Family HDHP policy well in terms of calculating your annual HSA contribution limit. It doesn't handle the sharing of the Family contribution limit between the spouses; instead it assigns the Family limit to each spouse, never mind that it did it for both.
"Why does TT say husband can contribute $1367 to an HSA in 2021, knowing his age and that Medicare is retroactive for 6 months, so that contributions would be penalized? The $1367 seems incorrect."
TurboTax assumes that you will handle this, that is, you will enter those back dated months as Medicare. I don't believe that historically, Medicare has been terribly consistent on that 6 months backdating, so it's better for you who actually know which months you had what to just tell us. So in this case, you would have indicated Medicare even for Jan and Feb of 2021. So for 2021, your husband's annual HSA contribution limit should be zero.
"On 'Type of HDHP Coverage' I indicated 'Family Plan' for January and February, and Medicare for other months (since Part B Medicare did not start until March 2021). That's what I did for husband's coverage."
If you have any form of Medicare, A, B, Z, whatever, you must indicate "Medicare" for each month that you have any such coverage, See above.
"For 'did you overfund your HSA in 2020?' answer YES and enter the $500 excess contribution. "
The wording of this question on the TurboTax screen is poor. You should enter "Yes" to that question ONLY if you carried over the 2020 excess to 2021, as you suspected. Since you did not do this (the carryover), just answer "no" and keep going.
Now I am a little confused on what happened - I commend you for always indicating 2020 and 2021, but I don't always read this correctly - so please go back through the HSA interview, answering the Medicare month as I indicated above, and also the "did you overfund" as no, and then tell me what you have.
Also, at the bottom of your response, please type "@" and "BillM223" without the space in between so that I will be notified.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
