@tprender627
"I followed steps in HSA interview as mentioned in posts (very helpful). But later on Turbo Tax mentioned there were errors on Tax Form 8889-T and it asked to provide a checkbox for each month in 2023 that had HDHP plan."
That's normal. For each month indicate the type of coverage you had on the first day of the month. For January-June that would be "family HDHP" and for July-December you would click "Other" (because of the FSA).
"2.) If HDHP plan is valid between January thru June? Would the the excess or invalid contributions in HSA only be what was contributed between July through December?"
No. What counts is your total contributions for the year against your eligible amount. The IRS does not care when the contributions were made. If you were eligible for 6 months your maximum contributions are $3875, and you could even make them now, in 2024, as long as you contribute before April 15 and your total contributions are not more than $3875.
3.) HSA and FSA limits were not exceeded during 2023, but as understand the interaction by having them open at same the makes the contributions invalid and thus have to be refunded/withdrawn by deadline for Tax return April 2024 to avoid 6% penalty.
Your understanding is incorrect. The addition of the FSA makes you ineligible to contribute for the months of July-December, but you are still eligible to contribute for January-June. And in fact, the date of the contribution does not matter, as long as you don't contribute more than your adjusted limit based on your change in coverage.
