I cannot reconcile what you describe with what I see in my tests. In my tests, the code W amount shows up as "Excess employer contributions withdrawn" because I chose to tell TurboTax that I would withdraw it (as I think you did).
However, I am struck by one comment that you made: "I've retried it many time and get the same result".
Occasionally, a number in TurboTax gets "stuck"; that is, the number stays in TurboTax from pass to pass, even when you have changed other values which should have caused that number to go to zero (or at least change).
The only cure I have ever found for this is to do an "HSA Reset", which is a process by which you remove all the HSA data so that you can start again fresh. Although it is a certain amount of work, it will be faster and more certain than going through the interview over and over hoping to get it right.
Just remove all HSA data as shown below.
HSA RESET
***Reset***
1. make a copy of your W-2(s) (if you don't have the paper copies)
2. delete your W-2(s) (use the garbage can icon next to the W-2(s) on the Income screen)
*** Desktop/Windows***
3. go to View (at the top), choose Forms, and select the desired form (1099-SA (if one), 8889-T, and 8889-S (if one)). Note the Delete Form button at the bottom of the screen.
*** Online ***
3. go to Tax Tools (on the left), and navigate to Tools->Delete a form
4. delete form(s) 1099-SA (if one), 8889-T, and 8889-S (if one)
5. go back and re-add your W-2(s), preferably adding them manually
6. go back and redo the entire HSA interview....
If you are using Desktop/Mac, let me know - I will look up how to delete a form on the Mac.
If by some odd chance, you see a form 8853, please delete it as well, as well as the MSA worksheet that goes with it (probably right below).
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
